## Facts

- Freeport sought authorization from the Department of Energy (DOE) to export liquefied natural gas (LNG) equivalent to about 0.4 billion cubic feet per day from a Texas terminal.
- Under Natural Gas Act (NGA) § 3(a), DOE must authorize exports unless it finds they are inconsistent with the public interest.
- The Federal Energy Regulatory Commission (FERC) separately approved the siting and construction of the terminal facilities and performed project-level NEPA review of those construction and operational impacts.
- DOE issued orders authorizing exports to non–free-trade-agreement countries and conducted NEPA review focused on the export authorization decision.
- Sierra Club petitioned for review, arguing DOE failed to adequately analyze (1) indirect effects of exports (including increased upstream production and downstream combustion emissions) and (2) cumulative impacts with other LNG export approvals.
- Sierra Club also argued DOE’s NGA “public interest” finding improperly discounted environmental, climate, and distributional concerns.

## Issues

1. Whether DOE violated NEPA by inadequately analyzing indirect environmental effects and cumulative impacts associated with authorizing LNG exports.
2. Whether DOE acted arbitrarily or capriciously under the NGA in concluding the exports were consistent with the public interest.

## Decision

- The D.C. Circuit denied the petition for review and upheld DOE’s export authorization.
- The court held DOE reasonably declined to conduct the detailed upstream production analysis sought because the causal chain between the authorization and specific production activities was too uncertain to be reasonably foreseeable.
- The court held DOE’s treatment of downstream consumption and greenhouse-gas emissions was adequate where project-level quantification depended on uncertain market behavior and end-use decisions.
- The court held DOE permissibly relied on broader studies to address cumulative impacts of multiple export authorizations rather than repeating extensive cumulative analysis in each individual authorization.
- The court held DOE’s NGA public-interest determination was reasonable given the statutory presumption favoring exports, DOE’s consideration of relevant economic and environmental factors, and DOE’s explanation for why alleged harms did not outweigh benefits.

## Legal Principles

- NEPA requires a “hard look” at environmental effects that are reasonably foreseeable and closely related to the agency action; agencies need not analyze effects resting on speculative or attenuated causal links.
- For LNG export authorizations, NEPA does not compel detailed, project-specific modeling of upstream production impacts or downstream combustion emissions when such impacts cannot be predicted with sufficient specificity due to intervening market variables.
- Agencies may address cumulative impacts through programmatic or macro-level analyses and may rely on those studies in individual actions when doing so reasonably covers the cumulative question.
- Under NGA § 3(a), exports are presumptively authorized; challengers bear the burden of showing inconsistency with the public interest.
- DOE satisfies arbitrary-and-capricious review where it considers environmental and distributional concerns as part of the public-interest balance and explains why they do not overcome the statutory presumption.

## Conclusion

The court upheld DOE’s LNG export authorization, concluding DOE’s NEPA review reasonably bounded indirect and cumulative-impact analysis to effects that were sufficiently foreseeable, and DOE’s NGA public-interest determination permissibly balanced environmental considerations against the statute’s presumption favoring exports.


Sierra Club v. U.S. Dep’t of Energy, 867 F.3d 189 (D.C. Cir. 2017)