Fuel Safe Washington v. Federal Energy Regulatory Commission

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
DEC 1 2004
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

FUEL SAFE WASHINGTON,

Petitioner,
v.
FEDERAL ENERGY REGULATORY
COMMISSION,
No. 03-9577
Respondent,
-------------------------------------
POWEREX CORP. and GEORGIA
STRAIT CROSSING PIPELINE LP,

Intervenors,
-------------------------------------
WHATCOM COUNTY,

Amicus Curiae.

APPEAL FROM ORDERS OF THE
FEDERAL ENERGY REGULATORY COMMISSION
(F.E.R.C. NOS. CP01-176, CP01-177, CP01-178, CP01-179)

Angela Coats, Student Intern, Brett Durbin, Student Intern, and Michael J.
Robinson-Dorn, Assistant Professor of Law & Director, Kathy and Steve Berman
Environmental Law Clinic, University of Washington, School of Law, Seattle,
Washington, for Petitioner.
Judith A. Albert, Attorney (Cynthia A. Marlette, General Counsel, and Dennis
Lane, Solicitor, with her on the brief), Federal Energy Regulatory Commission,
Washington, D.C., for Respondent.

Steven W. Snarr, Georgia Strait Crossing Pipeline LP, Salt Lake City, Utah
(Charles H. Shoneman and Jacqueline R. Java, Bracewell & Patterson, L.L.P.,
Washington, D.C., with him on the brief), for Intervenors, Georgia Strait Crossing
Pipeline LP and Powerex Corp.

Randall J. Watts, Chief Civil Deputy Prosecuting Attorney for Whatcom County,
Bellingham, Washington, filed an amicus curiae brief for Whatcom County.

Before LUCERO , ANDERSON , and McCONNELL , Circuit Judges.

ANDERSON , Circuit Judge.

Petitioner Fuel Safe Washington (“FSW”) seeks review of two orders by

the Federal Energy Regulatory Commission (“FERC”) granting a Certificate of

Public Convenience and Necessity (“CPCN”) to Georgia Strait Crossing Pipeline

LP (“GSX”), permitting GSX to build a new natural gas pipeline and ancillary

facilities in northwest Washington state, and denying requests for rehearing.

FSW asks us either to vacate FERC’s final orders or, alternatively, to remand this

matter to FERC for further proceedings. We decline to vacate FERC’s orders or

remand for further proceedings. The petition for review is therefore denied.

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 BACKGROUND

Pursuant to the Natural Gas Act, FERC has plenary jurisdiction over (1)

“the transportation of natural gas in interstate commerce”; (2) “the sale in

interstate commerce of natural gas for resale for ultimate public consumption”;

and (3) “natural-gas companies engaged in such transportation or sale.” 15

U.S.C. § 717(b). See City of Fort Morgan v. FERC , 181 F.3d 1155, 1159 (10th

Cir. 1999). There is an exception from FERC jurisdiction, called the Hinshaw

Amendment exception, which excludes from FERC’s jurisdiction a natural gas

company’s activities if (1) the company receives all gas “within or at the

boundary of a State”; (2) “all the natural gas so received is ultimately consumed

within such State”; and (3) the service of that intra-state gas, and the

accompanying facilities and rates, are “subject to regulation” by the state. 15

U.S.C. § 717(c); see also City of Fort Morgan , 181 F.3d at 1159.

Prior to constructing or operating any natural gas pipeline and related

facilities, a company subject to FERC’s jurisdiction must obtain from FERC “a

certificate of public convenience and necessity,” 15 U.S.C. § 717f(c)(1)(A),

indicating FERC’s determination that the proposed service “is or will be required

by the present or future public convenience or necessity.” 15 U.S.C. § 717f(e).

As a part of its review process before issuing a CPCN, FERC conducts an

environmental analysis under the National Environmental Policy Act (“NEPA”),

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42 U.S.C. §§ 4321-70f, which “‘prescribes the necessary process’ by which

federal agencies must ‘take a hard look at the environmental consequences’ of

their proposed actions.” Lee v. U.S. Air Force , 354 F.3d 1229, 1237 (quoting

Utahns for Better Transp. v. U.S. Dep’t of Transp. , 305 F.3d 1152, 1162-63 (10th

Cir. 2002), modified , 319 F.3d 1207 (10th Cir. 2003) (further quotation omitted)).

In contemplating “‘major Federal actions significantly affecting the quality of the

human environment,’ agencies must prepare an environmental impact statement

(“EIS”) in which they consider the environmental impact of the proposed action

and compare this impact with that of ‘alternatives to the proposed action.” Id.

(quoting 42 U.S.C. § 4332(2)(C)).

On April 24, 2001, GSX applied for CPCNs to construct and operate a

natural gas pipeline and accompanying facilities in Whatcom and San Juan

Counties, Washington. The proposed pipeline would

carry gas east to west, from the Canadian border near Sumas,
Washington, overland across Whatcom and San Juan Counties,
Washington, then underwater across the Strait of Georgia, to a subsea
interconnection mid-channel in the Boundary Pass at the international
border between the United States and Canada. The onshore facilities
will consist of approximately 32.1 miles of 20-inch pipe, 1.4 miles of
16-inch pipe, a 10,302 horsepower (ISO-rated) compressor station at
Cherry Point, Washington, and a receipt point meter station at the
border near Sumas. The offshore facilities will consist of
approximately 14 miles of 16-inch pipe, with a subsea tap valve
assembly near the San Juan Islands.

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Georgia Strait Crossing Pipeline LP , 100 F.E.R.C. ¶ 61,280, at 62,191 (2002)

(footnote omitted). At Sumas, the east terminus of the pipeline, the proposed line

would interconnect with a Canadian pipeline, Westcoast Energy Inc. and with a

United States pipeline, Northwest Pipeline Corporation. At its west subsea

terminus, the pipeline would interconnect with a new pipeline to be built and

operated by Georgia Strait Crossing Pipeline Ltd (“GSX-Canada”) which would

transport gas from the interconnection point to Vancouver Island, British

Columbia. While it was clear that the pipeline was primarily designed to

transport Canadian gas to Canadian consumers on Vancouver island, the system

was designed from the beginning to permit as much as 10% of its capacity to, at

times, be transported through the Northwest connection to United States markets. 1

GSX proposed that Powerex, a British Columbian corporation, would be the

initial transportation service customer.

On June 1, 2001, FERC sent a “Notice of Intent to Prepare an

Environmental Impact Statement for the Proposed Georgia Strait Crossing

1
GSX’s application for CPCNs stated that “[a]lthough the GSX project is
designed to physically flow gas only in one direction, from Sumas to Vancouver
Island, the system will be able to accommodate backhauls by displacement. For
example, if Centra has off-peak excess supply on its system, such supply could be
backhauled to markets in the U.S. via displacement of scheduled GSX system
deliveries to Centra.” Application for Certificates of Public Convenience and
Necessity at 20, R. Vol. I. Centra is Centra Gas British Columbia Inc., a
distribution affiliate of Westcoast.

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Project, Request for Comments on Environmental Issues, and Notice of Public

Scoping Meetings and Site Visit” (“NOI”) to 339 interested parties. FERC held

two public meetings in Washington State and received comments on the proposed

project throughout the summer of 2001.

On December 10, 2001, FERC’s staff filed its draft EIS (“DEIS”) with the

Environmental Protection Agency (“EPA”), announced it in the Federal Register,

and mailed it to individuals and organizations on a mailing list created for the

project. Under Council on Environmental Quality (“CEQ”) regulations

implementing NEPA, 40 C.F.R. §§ 1500-08, the public had until February 4,

2002, to comment on the DEIS. The Commission held another public meeting in

Washington on February 26, at which twenty-five people made statements. The

Commission received comments on the DEIS from four federal agencies, five

state agencies, five local agencies and elected officials, two Native American

groups, six companies and organizations, ten individuals, and the applicant, GSX.

Meanwhile, the Commission proceeded with its review of the non-

environmental aspects of the project. It published notice of GSX’s application in

the Federal Register on May 4, 2001. Twenty-four parties filed motions to

intervene. On March 13, 2002, FERC issued a Preliminary Determination,

concluding that, subject to completion of the environmental review process, the

benefits of the proposed project outweighed the potential adverse effects. None

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of the parties to this case requested a rehearing of the Preliminary Determination.

On June 17, 2002, Whatcom County filed a motion to dismiss GSX’s application,

or alternatively seeking an evidentiary hearing, arguing that FERC lacked

jurisdiction over the pipeline under § 7 of the NGA because the gas supply

sources and end consumers were Canadian, and there was therefore no interstate

transportation of the gas. On July 17, 2002, FERC issued the FEIS. Following

the issuance of the FEIS, FERC received further comments from two individuals,

the EPA, and the United States Public Health Services, Department of Health and

Human Services (“HHS”).

On September 20, 2002, FERC issued a final order denying Whatcom

County’s motion to dismiss, analyzing the environmental issues and issuing a

CPCN authorizing the construction and operation of the proposed pipeline. In

that order, FERC responded to the comments made on the FEIS by the EPA, HHS

and the two individuals. Whatcom County did not seek rehearing of the final

order and FSW only requested rehearing of the environmental issues. The

Commission addressed the environmental issues in its rehearing order, and

rejected FSW’s arguments.

On March 17, 2003, FSW petitioned for review in the Ninth Circuit. FERC

filed a motion to dismiss on the ground of improper venue. On July 30, 2003, the

Ninth Circuit transferred the case to this court and, on October 17, 2003, the

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Commission filed the certified index to the record. Georgia Strait and Powerex

intervened in the proceedings before this court. Meanwhile, on September 3,

FSW had requested the Commission to reopen the evidentiary record and prepare

a supplemental EIS. FERC denied the request. This petition for review followed.

DISCUSSION

I. Jurisdiction

As indicated above, FERC has plenary jurisdiction over the transportation

of natural gas in interstate commerce. FSW argues that FERC improperly

exercised jurisdiction over the proposed pipeline because the pipeline will not

transport gas in interstate commerce. To the contrary, FSW argues, the GSX

pipeline will transport only Canadian gas to Canadian consumers. 2
Alternatively,

2
In response to Whatcom County’s motion to dismiss, the Commission
stated:

We share Whatcom County’s expectation that Georgia Strait’s
proposed pipeline will serve principally to move Canadian gas to
Canadian customers, i.e., to promote foreign commerce. We also
share Georgia Strait’s expectation—based on evidence in the
record—that some lesser amount of the proposed pipeline’s capacity
will be given over to moving gas between states. Because NGA
section 7 does not grant the Commission jurisdiction by degree, no
matter how small this interstate aspect of Georgia Strait’s business is
when compared to the pipeline’s foreign commerce transactions, this
movement of gas between states subjects the entire project to our
regulatory oversight under NGA section 7.
(continued...)

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FSW argues that the state of Washington may properly regulate the pipeline

because the pipeline is subject to the Hinshaw Amendment exception to FERC

regulation.

FERC responds by arguing that, because FSW failed to challenge FERC’s

jurisdiction in its rehearing request before the Commission, FSW is precluded by

statute from seeking review of that order in this court. FERC thus argues we lack

jurisdiction to review the propriety of FERC’s exercise of jurisdiction over the

pipeline. FSW replies that, while it admittedly failed to raise the issue of the

propriety of FERC’s jurisdiction in its own petition for rehearing, Whatcom

County raised that issue in its motion to dismiss, FERC addressed the matter in its

(...continued)
2

Georgia Strait Crossing Pipeline LP, 100 FERC ¶ 61,280 at 62,197. The
Commission further stated:

Our basis for asserting jurisdiction did not depend on future
facilities, instead our finding was based on the proposed initial
configuration of the new pipeline. This configuration includes an
interconnection with the existing Northwest pipeline, at which
interconnect gas in interstate commerce will be both received and
delivered. As noted, it is immaterial how much gas crosses over at
this interconnect. Further, it is immaterial whether gas moves across
this connection physically, molecule by molecule, or moves between
Georgia Strait’s and Northwest’s systems by displacement. The
interconnect itself constitutes physical and operational integration
with the existing interstate gas grid, and so renders Georgia Strait’s
proposed project jurisdictional under NGA section 7.

Id.

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rejection of that motion, and the matter was therefore raised and addressed by

FERC and is available for review in this court. We address first, as we must, our

own jurisdiction to review FERC’s orders.

Section 19(b) of the NGA provides that “[n]o objection to the order of the

Commission shall be considered by the court [of appeals] 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).

“Section 19(b) reflects the policy that a party must exhaust its administrative

remedies before seeking judicial review.” Fed. Power Comm’n v. Colo. Interstate

Gas Co. , 348 U.S. 492, 499 (1955). This general rule of exhaustion, which FSW

does not contest, has been consistently applied by our court and many others. As

we have said, “the presentation of a ground of objection in an application for

rehearing by the Commission is an indispensable prerequisite to the exercise of

power of judicial review of the order on such ground.” Pan Am. Petroleum Corp.

v. Fed. Power Comm’n , 268 F.2d 827, 830 (10th Cir. 1959). We have further

indicated that “we must apply this statute ‘punctiliously’ to carry out its purpose.”

Colorado Interstate Gas Co. v. FERC , 890 F.2d 1121, 1125 (10th Cir. 1989)

(quoting New Jersey Zinc Co. v. FERC , 843 F.2d 1497, 1503 (D.C. Cir. 1988)).

We have accordingly applied that exhaustion policy to refuse to address

procedural matters which were not raised in petitions for rehearing before FERC.

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See, e.g. , R.R. Comm’n v. FERC , 874 F.2d 1338, 1342 (10th Cir. 1989) (refusing

to consider an objection to expert witnesses because not raised in petition for

rehearing before FERC); Phillips Petroleum Co. v. Fed. Power Comm’n , 556 F.2d

466, 471 (10th Cir. 1977) (refusing to consider whether a contract was renewed

for purposes of obtaining a new rate because the issue was not raised in the

petition for rehearing before FERC); Skelly Oil Co. v. Fed. Power Comm’n , 401

F.2d 726, 729 (10th Cir. 1968) (refusing to consider arguments by amicus because

“not raised by any party on an application for rehearing as required by § 19(b) of

the Act”); Pan Am. Petroleum Corp. , 268 F.2d at 829-30 (refusing to consider

challenge to an order which was not challenged in a petition for rehearing). Other

courts have similarly applied § 19(b). See, e.g. , Nat’l Comm. for the New River,

Inc. v. FERC , 373 F.3d 1323, 1332 (D.C. Cir. 2004) (refusing to consider whether

Commission adequately considered alternatives because not raised in petition for

rehearing); Consol. Gas Supply Corp. v. FERC , 611 F.2d 951, 959 (4th Cir. 1979)

(noting that “this rule [of exhaustion of administrative remedies] is particularly

applicable when, as here, the objections are procedural and, if sound, subject to

correction”).

We have also applied the virtually identical rehearing requirement

contained in the Federal Power Act to refuse to consider whether the Federal

Power Commission properly determined that a petitioner had to obtain a license

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for a hydroelectric power project where the petitioner failed to seek rehearing at

all. Utah Power & Light Co. v. Fed. Power Comm’n , 339 F.2d 436, 438 (10th

Cir. 1964). 3
We have had no occasion to apply § 19(b)’s rehearing requirement in

the specific context of this case— i.e. , when the issue sought to be raised before

our court, but not argued on rehearing before FERC, is whether FERC properly

asserted its regulatory jurisdiction over the transportation of natural gas. FSW

argues it may avoid the general rule of § 19(b) in this case for two reasons: its

challenge to FERC’s jurisdiction is the equivalent of a challenge to FERC’s

subject matter jurisdiction, which can always be raised, even sua sponte by the

court itself; and alternatively, Whatcom County raised the issue before FERC and

FERC addressed it, so the need to have the agency address the issue first has

effectively been satisfied.

A. Subject Matter Jurisdiction

In support of this argument, FSW relies heavily on the Eighth Circuit’s

decision in Union Electric Co. v. Federal Power Commission , 326 F.2d 535 (8th

Section 313(b) of the Federal Power Act, 16 U.S.C. § 825l(b), contains
3

language virtually identical to § 19(b) of Natural Gas Act. “The relevant
provisions of the Federal Power Act and the Natural Gas Act ‘are in all material
respects substantially identical.’” Sierra Ass’n. for Env’t v. FERC, 791 F.2d
1403, 1406 n.2 (9th Cir. 1986) (quoting Arkansas Louisiana Gas Co. v. Hall, 453
U.S. 571, 577 n.7 (1981) (further quotation omitted)).

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Cir. 1964), rev’d on other grounds , 381 U.S. 90 (1965). As more fully explained

in Judge McConnell’s concurrence, the pertinent part of Union Electric is dictum

and, in any event, is inapposite. Section 19(b) requires all challenges to the scope

of an agency’s regulatory jurisdiction to be raised first before the Commission.

See Sunray Mid-Continent Oil Co. v. Fed. Power Comm’n , 364 U.S. 137, 156-57

(1960) (applying § 19(b)’s requirement that all issues submitted for judicial

review must be raised before the Commission to refuse to address an argument

that the Commission’s order might violate the Natural Gas Act and thereby

impermissibly extend its regulatory jurisdiction); Intermountain Mun. Gas Agency

v. FERC , 326 F.3d 1281, 1285 (D.C. Cir. 2003) (refusing to address, because not

raised in the petition for rehearing, petitioner’s challenge to “FERC’s

interpretation of the Hinshaw Amendment to preclude exempting [from FERC

regulation] a system which delivers gas that is subsequently transported

temporarily out of state but returned for ultimate consumption within the state of

delivery”); 4
Aquenergy Sys., Inc. v. FERC , 857 F.2d 227, 230 (4th Cir. 1988)

4
The court noted in Intermountain Municipal Gas Agency that, because the
petitioner failed to raise the issue before FERC, FERC never had an opportunity
to address the issue. Id. We acknowledge that FERC did, in fact, address the
issue of its jurisdiction in this case, in response to Whatcom County’s motion to
dismiss. As we discuss more fully infra, that does not eliminate the fact that
FSW, the party now challenging FERC’s regulatory jurisdiction, failed to comply
with the statutory requirement to seek rehearing before petitioning for review in
this court.

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(expressly responding to petitioner’s argument that “the Commission lacks

jurisdiction because operation of the project does not affect interstate commerce”

and stating “[w]e decline to consider this contention because it was not presented

to the Commission” and “[w]e will not consider a contention not presented to, or

considered by, the Commission”). Cf. City of Farmington v. FERC , 820 F.2d

1308, 1311 n.1 (D.C. Cir. 1987) (in rejecting FERC’s argument that the court

lacked jurisdiction to hear petitioner’s challenge to FERC’s decision that

petitioner’s gas purchases were subject to FERC’s regulatory jurisdiction, the

court did not rely upon the rule that subject matter jurisdiction may be raised at

any time).

We therefore reject FSW’s argument that its challenge to FERC’s decision

that the GSX pipeline fell within its regulatory jurisdiction is the equivalent of a

challenge to FERC’s subject matter jurisdiction and accordingly not subject to

the limitations of § 19(b).

B. Whatcom County’s Challenge to FERC’s Jurisdiction

FSW alternatively argues that, while it did not raise the issue in its own

petition for rehearing, Whatcom County raised it in its motion to dismiss GSX’s

application, and FERC addressed it in its denial of that motion. Most courts

addressing this issue have required the party seeking review of a decision to have

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sought rehearing itself before the Commission. See Process Gas Consumers

Group v. FERC , 912 F.2d 511, 514 (D.C. Cir. 1990) (“[T]he party seeking review

must raise its objections in its own application for rehearing to the

Commission.”); Columbia Gas Transmission Corp. v. FERC , 848 F.2d 250, 255

(D.C. Cir. 1988) (stating that a court cannot “consider an objection not raised by

petitioner but argued to FERC by another party to the same proceeding”); United

Gas Pipe Line Co. v. FERC , 824 F.2d 417, 434 (5th Cir. 1987) (“The plain

language of section 19 requires that the very party seeking judicial review must

raise its objections in its own petition for rehearing.”). We join those courts and

hold that FSW cannot “bootstrap” its way into our court be relying upon the fact

that another party argued the issue before the Commission.

Furthermore, even were we to permit such bootstrapping by FSW, Whatcom

County was obligated by statute to seek rehearing from the Commission of its

challenge to FERC’s exercise of its regulatory jurisdiction. It did not do so.

FSW may not itself fail to preserve an issue, then take advantage of the fact that

another party raised the issue but failed to properly pursue it by seeking

rehearing, thereby allowing the decision below to effectively become final, and

seek now to escape all of those defaults. We lack jurisdiction to consider whether

FERC correctly determined that the GSX pipeline was subject to FERC regulation

as an interstate pipeline.

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II. NEPA Compliance

FSW did seek rehearing on the general issue of FERC’s compliance with

NEPA, asserting that FERC failed to so comply in various ways. We therefore

address those arguments. We review agency action for compliance with NEPA

under the Administrative Procedures Act (“APA”), 5 U.S.C. §§ 701-06. The APA

“empowers a reviewing court to hold unlawful and set aside [final] agency action,

findings, and conclusions found to be arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law.” Lee , 354 F.3d at 1236 (further

quotation omitted). This is a “deferential [standard]; administrative

determinations may be set aside only for substantial procedural or substantive

reasons.” Id. (further quotation omitted).

NEPA delineates the process by which federal agencies “take a hard look at

the environmental consequences” of a proposed agency action. Pennaco Energy,

Inc. v. Dep’t of Interior , 377 F.3d 1147, 1150 (10th Cir. 2004) (further quotation

omitted); see Robertson v. Methow Valley Citizens Council , 490 U.S. 332, 350

(1989). Before taking “major Federal actions significantly affecting the quality of

the human environment,” agencies take that “hard look” at potential

environmental impacts by means of an environmental impact statement (“EIS”).

See 42 U.S.C. § 4332(2)(C). The EIS evaluates the environmental impact of the

proposed action, as compared with the impact of alternative courses of action.

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NEPA does not “impose substantive limits on agency conduct,” Pennaco Energy ,

377 F.3d at 1150 (further quotation omitted), “nor does it require agencies to

elevate environmental concerns over other valid concerns.” Lee , 354 F.3d at

1237. Accordingly, “[w]e apply a rule of reason standard (essentially an abuse of

discretion standard) in deciding whether claimed deficiencies in a FEIS are

merely flyspecks, or are significant enough to defeat the goals of informed

decisionmaking and informed public comment.” Utahns for Better Transp. , 305

F.3d at 1163.

FSW argues that the FEIS in this case was deficient because it failed to

adequately address four issues: reasonable alternatives; transboundary impacts;

cumulative acoustic impacts; and the impact of reasonably foreseeable

earthquakes.

A. Consideration of Alternatives

NEPA requires an FEIS to include a discussion of “alternatives to the

proposed action.” 42 U.S.C. § 4332(2)(C)(iii); see also 40 C.F.R. § 1502.14(a)

(requiring agencies to “[r]igorously explore and objectively evaluate all

reasonable alternatives, and for alternatives which were eliminated from detailed

study, briefly discuss the reasons for their having been eliminated”); Utahns for

Better Transp. , 305 F.3d at 1166. “The consideration of alternatives to a

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proposed action is ‘the heart of the environmental impact statement.’” Lee , 354

F.3d at 1238 (quoting 40 C.F.R. § 1502.14). However, the agency need not

analyze “the environmental consequences of alternatives it has in good faith

rejected as too remote, speculative, or . . . impractical or ineffective.” All Indian

Pueblo Council v. United States , 975 F.2d 1437, 1444 (10th Cir. 1992) (internal

quotation marks omitted). In deciding whether an agency has adequately

considered reasonable alternatives, “courts look closely at the objectives

identified in an EIS’s purpose and needs statement.” Citizens’ Comm. to Save

Our Canyons v. U.S. Forest Serv. , 297 F.3d 1012, 1031 (10th Cir. 2002).

FSW argues FERC’s discussion of reasonable alternatives was deficient in

two ways: (1) the scope of the project arbitrarily abbreviated the alternatives

analysis and (2) FERC inappropriately eliminated alternatives it had evaluated.

1. Scope of project

An agency may not “define [a] project so narrowly that it foreclose[s] a

reasonable consideration of alternatives.” Davis v. Mineta , 302 F.3d 1104, 1119

(10th Cir. 2002). FERC described the scope or purpose of the GSX pipeline

project as “provid[ing] a transportation system for natural gas to supply the

growing demand for natural gas on Vancouver Island [and] [i]n particular . . . [to]

transport natural gas . . . to two new electric-generation facilities on Vancouver

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Island.” Final Envtl. Impact Statement: Georgia Strait Crossing Project at 1–1,

R. Vol. III.

FSW argues that FERC’s narrow definition of the project’s scope—to

provide natural gas as a means to meet the increased need for electricity on

Vancouver Island—compelled it to ignore other ways to meet that need for

electrical power. We disagree. In discussing a no-action alternative, FERC

discussed various other ways to increase electrical power on the island:

alternative fuels, clean-coal technology, solar power, wind-powered electricity,

small-scale hydroelectric generation, and wave energy. The FEIS explained why

each was not a feasible alternative.

The FEIS went on to observe that:

[s]everal commentators on the draft EIS suggested that replacing or
upgrading the underwater electric transmission cables serving
Vancouver Island could reduce the near-term need for electric
generation capacity on the island and should be considered as an
alternative to the GSX Project. Because the direct transmission of
electricity to Vancouver Island does not meet the stated objectives of
the proposed project to provide a transportation system for natural
gas, consideration of replacing or upgrading the transmission cable
can only be considered in terms of the no-action alternative. If a
project sponsor were to replace or upgrade existing cables or were to
install new cables, demand for energy production on Vancouver
Island could be reduced to the extent that the demand for natural gas
could also be reduced. Despite this fact, no such project has been
proposed by potential sponsors .

FEIS at 4-3, R. Vol. III. FERC also noted that “generating electricity on the

mainland and replacing and upgrading its electric transmission cables would cost

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about $100,000,000 (Cdn) more than building the GSX Project and generating

electricity on Vancouver Island.” Id. As discussed more fully below, FERC then

considered a number of different natural gas pipeline alternatives.

FERC had before it a particular project proposal by a private natural gas

company, involving the building of a natural gas pipeline as a means to provide

electrical power on Vancouver Island. “Where the action subject to NEPA review

is triggered by a proposal or application from a private party, it is appropriate for

the agency to give substantial weight to the goals and objectives of that private

actor.” Citizens’ Comm. to Save Our Canyons , 297 F.3d at 1030. FERC was not

obligated to reject that project in favor of a non-natural gas alternative which was

purely hypothetical and speculative. Given that the agency is only obligated to

consider reasonable, non-speculative alternatives, we cannot say that its review of

non-natural gas pipeline alternatives, and rejection of them in favor of the GSX

project, was arbitrarily and improperly restricted by its definition of the scope and

purpose of the project.

2. Reasonable route and system alternatives

FSW next argues FERC completely failed to consider alternative Canadian

routes for the natural gas, and it failed to distinguish between alternatives that

might have environmental impacts in Canada but not the United States. FSW

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asserts that other agencies, namely the Environmental Protection Agency (“EPA”)

and the Washington State Department of Ecology (“WDOE”), shared FSW’s

concern that FERC’s discussion of alternatives was inadequate.

The draft EIS (DEIS) identified three all-Canadian routes, two of which

involved following parts of the Centra pipeline, while the third involved

following an existing BC Gas Inc. pipeline for part of the route. The DEIS

recommended no further consideration of these three routes because two of them

presented engineering difficulties and more significant environmental impacts

than the proposed GSX route. 5
The third alternative, the Sumas-Tilbury-Harmac

route, was environmentally acceptable but involved severe engineering problems

because it crossed through terrain that was particularly vulnerable to seismic

events, even moderate ones.

Following the issuance of the DEIS, GSX-Canada commissioned a study to

determine the feasibility of expanding the existing Canadian Centra and BC Gas

systems to meet the objectives of the GSX project. These were considered

alternative systems , rather than alternative routes , because they involved

5
One of the routes, the Sumas-Ioco-Comox route alternative, required the
crossing of urban areas, “significantly more forestland,” “several provincial
parks,” and “major waterbod[ies] . . . including four marine shoreline crossings
and four major river crossings.” Draft Environmental Impact Statement: Georgia
Strait Crossing Project at 4-4, R. Vol. II. The other route, the Sumas-Ioco-
Sechelt-Harmac route alternative, posed similar environmental impact concerns.

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expanding existing pipeline systems, although there was some overlap with parts

of the three all-Canadian routes which the DEIS had examined and recommended

be removed from consideration. 6

The FEIS describes the five pipeline system alternatives the Commission

considered: “the existing Centra, BC Gas Inc. (BC Gas), ARCO, and Cascade

systems as well as the previously planned Orca Natural Gas Pipeline (Orca)

project.” FEIS at 4-4, R. Vol. III. It concluded that: (1) expansion of the Centra

system, which already was the sole provider of natural gas to Vancouver Island,

was not a viable alternative because it involved “significant environmental and

engineering drawbacks” including the construction of “large sections of looped

pipeline through forested and mountainous terrain.” FEIS at 4-5, R. Vol. III; 7
(2)

the BC Gas system alternative was not viable because, although environmental

concerns were a “trade off” compared to the GSX system, the geotechnical

hazards associated with the BC Gas alternative were more significant; (3) the

ARCO system alternative was not viable because “to provide the volumes of

6
As the FEIS states, “[s]ystem alternatives differ from alternative pipeline
routes (i.e., route alternatives or route variations) in that they make use of
existing, modified, or planned pipeline systems to meet the stated objectives of
the proposed project.” FEIS at 4-4, R. Vol. III.
7
The Commission considered two variations of the expansion of the Centra
pipeline system, one of which involved the construction of a new marine crossing
and one which did not. The FEIS rejected both for essentially the same reasons
and noted that both alternatives also were more costly than the GSX project.

-22-
natural gas proposed by GSX-US this system would require expansion and

construction of new facilities similar to or greater than those proposed for the

GSX project.” Id. at 4-9; (4) the Cascade system alternative was not viable

because “a modification or expansion to accommodate the volumes proposed by

GSX-US would not be feasible.” Id. ; and (5) the Orca system alternative was not

feasible because it would be over 200 miles long, compared to the 84 miles of the

GSX project, would have “greater onshore and offshore impacts” and had recently

been “put on hold due to a lack of firm commitment from potential major

customers.” Id. at 4-10. Having concluded that these system alternatives,

involving expansions of varying degrees of existing pipelines, were not viable

alternatives, but were preferable environmentally to a completely new route

alternative through Canada, the FEIS concluded that none of the Canadian

alternatives was feasible.

The FEIS then examined one route alternative which passes through the

United States, the Stanwood to Victoria route alternative. The FEIS concluded

that, while the alternative did have some environmental advantages, those were

“offset by disadvantages.” Id. at 4-11. It therefore recommended no further

consideration of the route. The FEIS also rejected the no action alternative,

because the need for the project would not be fulfilled.

-23-
 FSW argues that FERC ignored an “important distinction” between the

GSX project and the system alternatives—that the GSX project will have impacts

upon United States property while the Canadian system alternatives will not.

FERC’s discussion of the various alternatives explained why they were not

reasonable viable alternatives. The fact that it selected a route with more impacts

in the United States, rather than Canada, does not undermine the reasonableness

of that discussion.

FSW also argues that FERC ignored concerns expressed by two other

agencies—the EPA and the WDOE. The EPA submitted comments on the DEIS

expressing its concern that the

evaluation of alternatives in the draft EIS appears to have been
conducted more from the perspective of developing the rational for
eliminating alternatives than from the direction of the implementing
regulations for [NEPA] to “rigorously explore and objectively
evaluate all reasonable alternatives,” and to “devote substantial
treatment to each alternative considered in detail . . . so that
reviewers may evaluate their comparative merits.”

EPA Comments on the GSX DEIS, R. Vol. III. In response to this, FERC

expanded its discussion of several of the alternatives. The EPA remained

concerned about the discussion of alternatives:

While the discussion of alternatives has been expanded in the
final EIS, we remain concerned that the approach used to develop the
EIS has inappropriately eliminated reasonable alternatives, in both
the United States (US) and Canada, that could meet the stated
purpose and need for the project. We do not believe that the EIS has

-24-
 provided sufficient or compelling reasons for the elimination of
alternatives presented in Chapter 4.

8/22/02 Letter from EPA to FERC, R. Vol. IV.

“[NEPA] requires agencies preparing environmental impact statements to

consider and respond to the comments of other agencies, not to agree with them.”

Custer County Action Ass’n v. Garvey , 256 F.3d 1024, 1038 (10th Cir. 2001). On

the other hand, “a reviewing court ‘may properly be skeptical as to whether an

EIS’s conclusions have a substantial basis in fact if the responsible agency has

apparently ignored the conflicting views of other agencies having pertinent

expertise.’” Mineta , 302 F.3d at 1123.

FERC noted in its Certificate Order granting GSX its CPCNs that the “EPA

does not challenge the need for the proposed pipeline, but prefers that this need

be met by expanding an existing system.” Georgia Strait Crossing Pipeline LP ,

100 F.E.R.C. ¶ 61,280, at 62,198. FERC clearly considered and responded to

EPA’s comments on the DEIS and to its comments on the FEIS. As we have

stated many times, NEPA does not require any particular substantive result, just

adherence to the process by which agencies take their requisite “hard look.”

FERC is obligated to “articulate ‘a rational connection between the facts

found and the choice made.’” Friends of Marolt Park v. U.S. Dep’t of Transp. ,

382 F.3d 1088, 1096 (10th Cir. 2004) (quoting Baltimore Gas & Elec. Co. v.

Natural Res. Def. Council, Inc. , 462 U.S. 87, 105 (1983)). Given our deferential

-25-
standard of review, we conclude that the FEIS adequately considered alternatives

and was not arbitrary or capricious in its selection of the GSX project.

B. Transboundary Effects

NEPA’s requirement that an FEIS analyze “the environmental impact of [a]

proposed action,” 42 U.S.C. § 4332(2)(C)(i), includes an analysis of direct,

indirect, and cumulative effects. 40 C.F.R. § 1508.8. FSW argues that the FEIS

failed to adequately examine the transboundary effects of the GSX pipeline

project: “[t]hough FERC’s final EIS contains a section entitled “Canadian

Impacts,” FERC’s analysis in that section does not satisfy either NEPA or CEQ’s

guidance.” Pet’r’s Opening Br. at 41. FSW failed to challenge the alleged failure

to consider transboundary effects in its rehearing request. Accordingly, it is

barred by § 19(b) from raising that issue before us. See Colo. Interstate Gas Co. ,

348 U.S. at 496-97 (refusing to consider an issue not raised in petitioner’s request

for rehearing before the Commission); Pan Am. Petroleum Corp. , 268 F.2d at 830

(noting that “[t]he presentation of a ground of objection in an application for

rehearing by the Commission is an indispensable prerequisite to the exercise of

power of judicial review of the order on such ground ” (emphasis added)).

-26-
 C. Acoustic Effects

FSW argues that the FEIS failed to take a “hard look” at the project’s

acoustic effects. More specifically, FSW argues that FERC (1) failed to consider

the acoustic effects of pipeline repair and maintenance; (2) failed to assess

adequately acoustic effects before resources were committed to the project; and

(3) failed to consider cumulative acoustic effects.

1. Acoustic effects of repair and maintenance

FERC considered the direct and indirect impacts of noise caused by the

construction and operation of the pipeline on marine wildlife, marine fish, marine

invertebrates and certain endangered species. It concluded that, to the extent

information was available about the effects of noise on marine life, any increased

noise would be temporary and/or unlikely to cause significant adverse effects. 8

8
The FEIS first observed that there is a certain amount of ambient noise
present in the marine environment. It then noted that “[u]nderwater noises may
potentially affect marine mammals in several ways. Pulsed or continuous noise
may interfere with acoustic communication and detection . . . . Sharp pulsed or
unpleasant sounds may alter normal behavior or produce a startle response.
Pulsed or continuous noise may also damage auditory function leading to
temporary or permanent hearing loss.” FEIS at 3-58, R. Vol. III. More
specifically, the FEIS stated that “[n]oise associated with the construction phase
of the project would include temporary increases in vessel traffic, ship operations,
and construction noise during dredging and trenching operations.” Id. FERC
noted that “[s]ome research has concluded that marine mammals seem to
habituate to moderately noisy environments or to constant or predictable noises.”
(continued...)

-27-
 8
(...continued)
Id. It then concluded that, while any construction noise was expected to be well
below the level which can cause permanent damage, detailed studies on individual
species of marine mammals had not been done to determine the temporary or
permanent effect of increased noise levels. However, dredging or trenching could
cause some marine mammals to avoid the area.
With respect to operational noise, FERC stated that the proposed pipeline
was expected to produce low-frequency, low-energy sounds, which could travel
long distances, but would be at intensity levels less than those generated by
vessels and general wave turbulence. One expert predicted that “typical
commercial vessels that are within three miles of the pipeline would mask any
sounds emitted from the pipeline.” Id. at 3-59. FERC concluded that the only
marine mammals likely to hear noise emitted from the pipeline were baleen
whales who travel “occasionally” through the area. Id. FERC further noted that
“[t]he effect of a general increase in low frequency noise levels on the various
marine mammals that live in the Strait of Georgia is unknown.” Id. However, it
concluded that “[g]iven the expected sound levels that would be emitted from the
proposed pipeline and our current understanding of marine mammal sensitivity to
noise, we do not anticipate that operation of the pipeline would adversely affect
marine mammals.” Id.
With respect to marine fish, the FEIS stated that “[n]oise and physical
disturbance of fish habitats during construction may cause avoidance or
abandonment of the construction area during active construction and for some
time after construction is completed. However, it is not expected that such
disturbances would be substantial or long lasting.” Id. at 3-69–3-70. The FEIS
further stated that the acoustic effects caused by the pipeline’s operation were
to some degree unknown, but, based upon information FERC did have, including
data gathered from an existing natural gas transmission line in the Strait of
Georgia, were expected to be “negligible to low.” Id. at 3-73.
Finally, FERC considered the effects of construction and operation-related
noise on marine invertebrates. The FEIS found that “[n]oise or vibrations
associated with dredging and other construction activities may result in startle
responses or avoidance of the area [intertidal to nearshore waters] by mobile
invertebrates.” Id. at 3-83. The FEIS found little information on the effects of
pipeline operation noise on offshore water marine invertebrates, although it cited
two studies suggesting little effect. It concluded, however, from visual surveys of
underwater gas pipelines that “[t]he colonization of existing pipelines with
(continued...)

-28-
Nonetheless, FERC recommended that GSX develop a plan for monitoring noise

emitted by the pipeline, submit the plan for approval by the Office of Energy

Projects, and then report the findings. FSW does not challenge the adequacy of

FERC’s analysis of the acoustic effects of the construction and operation of the

GSX project.

FSW does allege, however, that the FEIS failed to consider the impact of

noise caused by repair and maintenance of the pipeline, to the extent that the

maintenance differs from the operation of the pipeline. FERC acknowledged that

pipeline repairs are foreseeable: “Even with proper installation, operation, and

routine maintenance of the pipeline system, repairs to the pipeline, including

replacement of portions of the system, are reasonably foreseeable actions in the

long term.” FEIS at 2-24, R. Vol. III. However, FERC then concluded that

“[b]ecause it is not possible to foresee where additional operation and

maintenance activities would occur along the pipeline system, further review of

the environmental impacts of those maintenance activities is beyond the scope of

this EIS. Appropriate environmental review of those activities would take place

under applicable rules and regulations.” Id.

8
(...continued)
diverse invertebrate communities shows that noise or vibrations associated with
pipeline operations does not appear to adversely affect invertebrate communities.”
Id. at 3-88.

-29-
 After refusing to expand the scope of the EIS to assess in detail the

environmental impact of hypothetical future maintenance actions, 9
FERC briefly

addressed maintenance issues, noting that “[m]aintenance activities requiring

pipeline excavation or replacement would be expected to be the same as those

described for construction.” FEIS at 3-73, R. Vol. III; see also id. at 3-104.

FERC also noted, in response to a comment on the DEIS, that emergency repairs

within a waterbody are “exceedingly rare.” Id. at SA3-20. FSW charges that

FERC’s conclusion that emergency repairs in waterbodies are very rare, and its

discussion of the acoustic impacts of pipeline maintenance, are conclusory and

unsupported by evidence in the record. We disagree.

The FEIS contains a section on pipeline accident data. The data show that

pipelines are vulnerable to failure as a result of “outside forces” such as heavy

equipment, earth movement, geologic hazards, and weather effects, all less likely

to damage an underwater pipeline, as opposed to an underground pipeline.

Pipelines are also vulnerable to corrosion, construction and material-related

40 C.F.R. § 1508.25 explains the scope of an EIS. Agencies must address
9

both actions and impacts or effects. Actions may be connected, similar, or
cumulative. Impacts may be direct, indirect, or cumulative. No one argues that
FERC should have addressed the environmental consequences of any other
proposed action (i.e., the Gateway Pacific Terminal or the OPALCO pipeline
project discussed infra) in the FEIS, only that the FEIS failed to address
adequately as cumulative impacts the impacts of repair and maintenance of the
pipeline.

-30-
defects, and “other” causes of rupture or damage. Because GSX is a subsidiary of

the Williams Companies, FERC examined the pipeline safety record of the many

miles of pipeline operated by Williams and its subsidiaries. It found that since

1991, Williams Northwest Pipeline 3900-mile-long system has had two reportable

leaks and twelve reportable ruptures; the 6000-mile-long Williams Gas Pipeline-

Central has had five reportable leaks and ten reportable ruptures; there have been

no incidents along the 900-mile Kern River Gas Transmission pipeline; since

1995, there have been five reportable incidents along the 10,500-mile-long

Transco system; and since 1995 there have been two reportable incidents along

the 6000-mile-long Texas Gas system. Given that the GSX pipeline portion that

is in the water is less vulnerable to many of the “outside forces” described, it was

reasonable for FERC to conclude that major repairs in the marine environment,

along the fourteen miles of offshore pipeline in the GSX project, would be rare.

“Even as to impacts that are sufficiently likely to occur such that they are

reasonably foreseeable and merit inclusion, the FEIS need only furnish such

information as appears to be reasonably necessary under the circumstances for

evaluation of the project.” Utahns for Better Transp. , 305 F.3d at 1176. Thus,

“[d]etailed analysis is required only where impacts are likely.” Id. (further

quotation omitted). The FEIS analysis of the likelihood of a major underwater

repair was adequate, given the circumstances.

-31-
 With respect to its conclusion about the acoustic effects of pipeline

maintenance, FERC reached the reasonable conclusion that, while pipeline repairs

and maintenance are foreseeable, it is impossible to determine now the precise

impacts because it is impossible to determine now the magnitude of a future

repair problem. To the extent, however, that a repair requires replacement of

existing sections of pipeline, FERC reasonably assumes that the acoustic impact

will be comparable to construction.

Given our deferential standard of review, we cannot say that the FEIS was

deficient for failing to address further the acoustic effects of pipeline repairs and

maintenance.

2. Cumulative acoustic effects

“An environmental impact statement must analyze not only the direct

impacts of a proposed action, but also the indirect and cumulative impacts.”

Utahns for Better Transp. , 305 F.3d at 1172 (further quotation omitted); see also

40 C.F.R. § 1508.25(a)(2). 40 C.F.R. § 1508.7 defines “cumulative impact” as

follows:

Cumulative impact is the impact on the environment which results
from the incremental impact of the action when added to other past,
present, and reasonable foreseeable future actions regardless of what
agency (Federal or non-Federal) or person undertakes such other
actions. Cumulative impacts can result from individually minor but
collectively significant actions taking place over a period of time.

-32-
 FSW argues FERC failed to analyze cumulative effects in three respects:

the cumulative acoustic effect of the project in light of noise already in the marine

environment; the cumulative acoustic effect of the project in light of reasonably

foreseeable future projects; and the pipeline’s cumulative environmental (non-

acoustic) effect in the marine environment in light of past, present and reasonably

foreseeable future actions.

A. Cumulative Acoustic Effect in Light of Background Marine
Environment Noise

FSW argues “FERC failed to properly analyze the additive effect of both

constant (pipeline operation) and intermittent (pipeline repair, construction,

maintenance) noise sources in combination with vessel traffic and other stressors

already in place in the marine environment.” Pet’r’s Opening Br. at 53. This is

simply another way of challenging FERC’s analysis of the noise impact caused by

the GSX project. We have already concluded that FERC’s analysis of the impact

on the marine environment of the construction, operation and maintenance of the

project is reasonable and not arbitrary or capricious. 10
We decline FSW’s

In its denial of FSW’s rehearing request, FERC summarized its findings
10

on the cumulative acoustic effect of routine repair and maintenance as follows:
“We considered the cumulative impact of noise on marine wildlife and found that
noise impacts from routine operation and maintenance activities should be
temporary, infrequent, and of an intensity significantly below levels capable of
(continued...)

-33-
invitation to revisit that issue, under the guise of discussing the cumulative

acoustic effect of the pipeline in the existing marine environment.

B. Cumulative Acoustic Effects in Light of Reasonably Foreseeable
Future Projects

Cumulative effect is defined as “the incremental impact of the action when

added to other past, present, and reasonably foreseeable future actions.” 40

C.F.R. § 1508.7. FSW claims FERC’s analysis of the cumulative effects of the

GSX project and other reasonably foreseeable actions in the same geographic

vicinity is cursory and conclusory.

The FEIS contains a table listing “Existing or Proposed Activities

Cumulatively Affecting Resources of Concern for the GSX-US Pipeline Project.”

Table 3.14-1, FEIS at 3-155, R. Vol. III. It lists present activities and reasonably

foreseeable future projects which may affect, inter alia , marine resources. The

only reasonably foreseeable future projects affecting marine resources are the

construction and operation of the Canadian portion of the GSX project, which

would involve 27.5 miles of offshore pipeline in the Strait of Georgia; the

OPALCO pipeline project, involving constructing a lateral off the GSX-US

10
(...continued)
causing any permanent damage.” Georgia Strait Crossing Pipeline LP, 102
F.E.R.C. ¶ 61,051, at 61,110 (2003) (footnote omitted).

-34-
pipeline and requiring eleven miles of offshore pipeline; and the Gateway Pacific

Terminal, a deepwater marine terminal facility south of the BP/Amoco Cherry

Point Refinery. 11
The FEIS contains the following summary of the likely

cumulative acoustic impact of those projects:

Visual and acoustic disturbances associated with pipeline
construction and operation may add to other commercial, public, and
recreational vessel disturbances to affect marine mammals, fish,
birds, and invertebrates. The magnitude of the impact would
probably be insignificant relative to the total marine environment
available to, and used by, these species, particularly given the short-
term nature of the construction activities.

FEIS at 3-158, R. Vol. III.

While we do not consider the cumulative acoustic impact analysis of the

FEIS “to be a model of clarity or thoroughness,” Custer County Action Ass’n , 256

F.3d at 1036, given our deferential standard of review, we find it sufficient.

FERC reasonably concluded that the primary acoustic impact on marine resources

will occur during the construction of the GSX pipeline and any other projects,

should they be built. This is a limited time period. Additionally, many marine

inhabitants are mobile and can avoid the area while any construction takes place. 12

There are other projects listed as impacting noise in the general area, but
11

FSW’s focus is on the impact of noise on marine resources, not noise in general.
12
The FEIS acknowledges that fish, at different stages, may not be mobile.
However, it concluded that the short duration of this displacement during
construction rendered the environmental impact reasonable. See FEIS at 3-69–3-
70.

-35-
Further, operational acoustic impacts are minimal and are generally less than

those caused by vessels in the area. Any repair impacts will be intermittent and

similar to construction impacts, except in the rare event that some catastrophic

failure occurs.

“Our job is not to question the wisdom of the [agency’s] ultimate decision

or its conclusion concerning the magnitude of indirect cumulative impacts.”

Colo. Envtl. Coalition v. Dombeck , 185 F.3d 1162, 1176 (10th Cir. 1999).

Rather, our job is to “examine the administrative record, as a whole, to determine

whether the [agency] made a reasonable, good faith, objective presentation of

those impacts sufficient to foster public participation and informed decision

making.” Id. at 1177. We conclude that FERC discharged its duty to take a “hard

look” at the cumulative acoustic impacts of the GSX project along with other

reasonably foreseeable projects in the same area. 13

C. Cumulative Non-Acoustic Environmental Effects

FSW argues the FEIS devoted insufficient attention to the cumulative non-

acoustic effects of the GSX project along with the other current and reasonably

13
Having determined that FERC’s analysis of acoustic impacts, direct,
indirect, or cumulative, was adequate, we need not address FSW’s argument that
FERC failed to adequately assess those effects before resources were committed
to the project.

-36-
foreseeable actions and activities. We disagree. While the FEIS’s analysis is

again not a “model of . . . thoroughness,” Custer County Action Ass’n , 256 F.3d

at 1036, we again find, applying our deferential standard of review, that it is

adequate and not arbitrary or capricious. See FEIS at 3-157–3-164, R. Vol. III.

D. Reasonably Foreseeable Earthquakes

Finally, FSW argues that FERC failed to evaluate the consequences of all

reasonably foreseeable earthquakes, in part by relying upon an inappropriate

standard, the Uniform Building Code , to identify what earthquakes are reasonably

foreseeable, which, in turn, led it to fail to provide a meaningful mitigation

analysis.

The FEIS states as follows concerning the standard used to design the

pipeline to withstand earthquakes: “GSX-US has designed the pipeline to

withstand ground motions associated with an earthquake with a 10 percent

probability of exceedance in 50 years . . . ; equivalent to a recurrence interval of

1 in 475 years. This is common practice for buildings as summarized in the 1997

Uniform Building Codes (International Conference of Building Officials, 1998).”

FEIS at 3-3, R. Vol. III. FERC responds that GSX correctly designed the pipeline

to meet current engineering design standards, as set out in three different building

-37-
guideline systems, as well as in accordance with the minimum federal standards

for the transportation of natural and other gas by pipeline. 49 C.F.R. § 192.

FSW’s complaint about the UBC is that it provides an inaccurate standard

for identifying reasonably foreseeable earthquakes. It argues the UBC uses a

standard of a ten percent chance of potential failure over the next fifty years,

which, FSW asserts, is far too low a standard and fails to identify larger but still

reasonably foreseeable earthquakes. Both the EPA and the State of Washington

Department of Natural Resources (“WDNR”) commented on the DEIS, raising a

question as to whether FERC was building the pipeline to withstand all

reasonably foreseeable earthquakes. 14
FERC responded to the EPA by explaining

that the ten percent chance of exceedance over fifty years refers to the chance of

an earthquake “capable of producing ground motions that would exceed the

14
The EPA stated:

We interpret the information presented on page 3-3 of the EIS to
indicate that there is a 10% chance over the next 50 years that design
standards would be exceeded by seismic motions, resulting in failure
(a rupture) of the pipeline. This seems like an extraordinarily high
rate of risk that cannot by addressed by simply converting the risk
statement to a recurrence interval of once in 475 years. Given the
proposed project’s lifespan, this recurrence interval provides a
misleading characterization of the project’s real potential risk based
on its working lifespan.

FEIS at FA 1-16, R. Vol. III. The WDNR questioned why the pipeline was not
designed to withstand earthquakes having a two percent chance of exceedance.
FEIS at SA 2-7, R. Vol. III.

-38-
pipeline design parameters, not the design standards. Engineering design

standards typically include a safety factor that accounts for the chance that natural

phenomena could exceed the design parameters.” FEIS at FA 1-16, R. Vol. III.

As we have stated above, FERC was obligated to consider the views of

other agencies, and in this case it did so. It was not obligated to defer to that

agency’s view. “We cannot displace the agencies’ choice between two conflicting

views, even if we would have made a different choice had the matter been before

us de novo.” Custer County Action Ass’n , 256 F.3d at 1036. We conclude that

FERC took a hard look at seismic hazards, and its decision regarding how to

address reasonably foreseeable earthquakes was reasonable. We therefore reject

FSW’s argument that, because the FEIS failed to analyze all reasonably

foreseeable earthquakes, its mitigation analysis was inadequate.

III. Motion to File an Amicus Brief

Georgia Strait Crossing Concerned Citizens Coalition, a registered non-

profit society in British Columbia, has filed a motion for leave to file an amicus

brief. It seeks to bring to our attention events which occurred after the orders at

issue in this case were issued. In particular, the Coalition argues that FERC

should consider as new information the results of the Canadian environmental

review of the GSX project. FERC and Intervenors Georgia Strait and Powerex

-39-
oppose the motion to file an amicus brief. FSW does not argue that we should

consider the Canadian proceedings. We deny the motion.

CONCLUSION

For the foregoing reasons, the petition for review is DENIED.

-40-
Fuel Safe Washington v. Federal Energy Regulatory Commission , No. 03-9577.

McConnell, J., concurring.

I join the opinion of the Court, and write separately only to clarify what I

understand to be this Court’s holding with respect to the requirement of Section

19(b) of the NGA that “[n]o objection to the order of the Commission shall be

considered by the court [of appeals] 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). Petitioner Fuel Safe

Washington has relied on dictum from Union Electric Co. v. Federal Power

Commission, 326 F.2d 535 (8th Cir. 1964), to argue that challenges to the

regulatory jurisdiction of the agency may be raised for the first time on appeal.

On the contrary, there is no exception to § 19(b) for challenges to the scope of an

agency’s regulatory jurisdiction.

The statement in Union Electric on which petitioner relies (“jurisdiction

over the subject matter cannot be waived by the parties by either action or lack of

action”), 326 F.2d at 540, was pure dictum. See id. (“It, however, is not

necessary for this Court to rule upon that contention . . . .”). Moreover, petitioner

has not cited and I have not found any decision adopting the dictum as the

holding of a court. The Union Electric dictum was based on an analogy to

challenges to the subject matter jurisdiction of the federal courts, which cannot be
waived by the parties and can, accordingly, be raised for the first time on appeal

and even sua sponte by any federal court. See, e.g., Bender v. Williamsport Area

School District, 475 U.S. 534 (1986). That principle, however, is grounded in

“the nature and limits of the judicial power of the United States,” which is

constitutional in nature, and “inflexible and without exception.” Mansfield, C. &

L.M. Ry. Co. v. Swan, 111 U.S. 379, 382 (1884). The scope of regulatory

jurisdiction and of the procedural limitations on appellate challenges to regulatory

agency decisions, by contrast, is a matter of policy for Congress to decide.

Congress has stated in no uncertain terms that “[n]o objection” to a FERC order

“shall be considered by the court [of appeals]” unless the petitioner has raised the

objection before the Commission in a petition for rehearing or has reasonable

grounds for failure to do so. 15 U.S.C. § 717r(b). Congress had not exempted

challenges to regulatory jurisdiction from that requirement, and we have no

authority to do so.

Contrary to the Union Electric dictum, the authority of a federal regulatory

commission is not analogous to the subject matter jurisdiction of a federal court.

Often, the scope of regulatory jurisdiction depends—as here—on technical

questions falling within the expertise of the agency. See, e.g., Aquenergy Sys.,

Inc. v. FERC, 857 F.2d 227, 230 (4th Cir. 1988) (FERC jurisdiction challenged on

the ground that the operation did not affect interstate commerce; court declined to

-2-
consider the issue on the ground that it was not presented to the Commission).

Such questions must be presented to the agency so that the agency can develop

the record, make appropriate findings, and apply its expertise to the jurisdictional

issue. For an appellate court to make such determinations without the benefit of

the agency’s expert opinion would usurp the agency’s proper role. If we were to

adopt the Union Electric dictum, parties before FERC could hold their cards close

to their vest and spring a challenge to the Commission’s regulatory authority at

the Court of Appeals level, in hopes of a different (and perhaps less well-

informed) outcome. That is what § 19(b) is designed to prevent.

-3-