DC Circuit aligns with Supreme Court on NEPA

In Sierra Club v. FERC, issued on September 30, 2025, the DC Circuit made clear that it has no intention of seeking to revive or distinguish decisions inconsistent with the Supreme Court’s May 2025 Seven County case, which made clear that judicial review under the National Environmental Policy Act (NEPA) is limited in scope and should focus only on procedure. Indeed, Sierra Club opens with a doctrinal declaration straight from Seven County: “The bedrock principle of judicial review in NEPA cases can be stated in a word: Deference.” 

That opening sets the tone for a ruling that reads as an energetic reaffirmation of Seven County’s mandate to curtail judicial overreach in NEPA cases. Where Seven County clarified that NEPA does not require agencies to analyze environmental effects of projects outside their jurisdiction, Sierra Club applies that principle with force, rejecting the notion that the Federal Energy Regulatory Commission (FERC, or the Commission), which had jurisdiction over a proposed pipeline, was required to consider associated issues such as the Tennessee Valley Authority’s (TVA’s) power plant emissions or alternative energy choices. The decision repeatedly invokes Seven County to rebuke Sierra Club’s arguments, portraying those arguments as relics of a pre-Seven County era of “searching NEPA review.”

Sierra Club arose in the context of TVA’s decision to retire a coal-fired electric power generation unit and replace it with a natural gas turbine. To supply the new turbine, the Tennessee Gas Pipeline Company (Tennessee Pipeline) proposed constructing a 32-mile lateral pipeline. FERC approved the pipeline in 2024, issuing a certificate of public convenience and necessity after preparing a 576-page Environmental Impact Statement (EIS). The Commission concluded the pipeline was needed based on TVA’s 20-year commitment to purchase the pipeline’s full capacity. It also concluded the pipeline’s environmental impacts would be less than significant, based in part on the anticipated reduction in greenhouse gas emissions that would result from the coal-to-gas transition.

The TVA power plant is undisputedly outside the Commission’s jurisdiction. Nevertheless, Sierra Club and Appalachian Voices (referred to collectively herein as Sierra Club) challenged the Commission’s pipeline approval under both NEPA and the Natural Gas Act (NGA), including on grounds having more to do with the power plant than the pipeline itself. With respect to NEPA, Sierra Club argued that FERC (1) improperly credited the pipeline with enabling emissions reductions, (2) failed to adequately analyze alternatives (including a no-action alternative) and (3) should have considered the pipeline and the new turbine as a single “connected action” requiring joint environmental review. With respect to the NGA, Sierra Club contended that the Commission (1) failed to scrutinize the market need for the pipeline by improperly relying on the precedent agreement, and (2) misjudged the pipeline’s environmental impacts, overlooked whether alternative energy sources could offer lower consumer costs, and thus failed to conduct an adequate public interest analysis.

The DC Circuit rejected Sierra Club’s NEPA claims. First, the court held that FERC reasonably credited the proposed pipeline with enabling a net reduction in greenhouse gas emissions. This conclusion was based on (i) TVA’s statement that without a replacement, it would need to continue operating coal units, and (ii) FERC’s finding that the pipeline was essential to supplying gas to the new turbine. The court acknowledged that the Commission could have taken a different approach to assessing downstream emissions, but citing Seven County, emphasized that NEPA requires deference to an agency’s reasonable judgment about how it analyzes indirect environmental effects.

Second, the court held that FERC’s alternatives analysis under NEPA was reasonable, largely because the Commission could permissibly assume that if it did not approve the specific pipeline being challenged by Sierra Club, another would likely be built to support TVA’s coal-to-gas transition. As a result, the gas turbine’s environmental impacts, including net emissions reductions, were foreseeable regardless of this pipeline’s approval. The court agreed with Sierra Club that FERC’s no-action analysis could have been clearer in stating its assumptions, but—again citing Seven County—the DC Circuit emphasized that courts must be “at their most deferential” when reviewing an agency’s speculative or predictive judgments about alternatives.

Third, the court rejected Sierra Club’s argument that FERC was required to analyze the pipeline and the TVA’s gas turbine project as “connected actions” under NEPA. The court reasoned that NEPA requires agencies to evaluate the environmental effects only of the specific “proposed action” within their jurisdiction, and not of separate projects outside their regulatory authority. Because FERC lacks jurisdiction over power generation facilities such as TVA’s gas turbine, it was not obligated to assess that project’s environmental impacts in its EIS. In rejecting Sierra Club’s argument, the court reiterated one of Seven County’s central tenets: agencies are not “required to analyze the effects of projects over which they do not exercise regulatory authority.” 

The court also noted that even if the Commission had erred by not analyzing the pipeline and TVA’s gas turbine as connected actions, any error would have been harmless and would not justify vacatur of FERC’s approval. For that proposition, it again cited Seven County along with other Supreme Court precedent. The court again noted that the Commission lacks jurisdiction over power generation and had already considered cumulative impacts, and that Sierra Club failed to identify any missing information that would have materially affected the Commission’s decision. Thus, a joint EIS between FERC and TVA would not have changed the outcome of the Commission’s otherwise-reasonable NEPA conclusions.

The court also rejected Sierra Club’s NGA claims, concluding that the Commission (i) reasonably determined market need for the pipeline based on the precedent agreement and had no obligation to consider other information about energy alternatives, and (ii) properly balanced the pipeline’s benefits and harms and, given its lack of jurisdiction over facilities used for the generation of electric energy, was not required to evaluate TVA’s choice of natural gas over renewable alternatives. 

In sum, Sierra Club is not a mere application of Seven County, but a full-throated endorsement of the “course correction” the Supreme Court sought to chart. The DC Circuit uses Seven County’s language to recalibrate its own precedent, explicitly disavowing earlier decisions, such as Sabal Trail (Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017)), that required FERC to consider the environmental effects of facilities over which it lacked jurisdiction. Indeed, Sierra Club even forswears what might have been plausible distinctions of Seven County. Ultimately, the opinion is didactic in its insistence that NEPA is merely procedural and does not warrant judicial micromanagement of an agency’s substantive choices. It thus sends a strong signal about how courts should apply Seven County going forward.