For a Better Bayou v. FERC arrives at an important moment for federal energy permitting. Loper Bright Enterprises v. Raimondo put statutory interpretation firmly in the hands of courts. A year later, Seven County Infrastructure Coalition v. Eagle County warned those same courts against second-guessing the judgments agencies make in defining and conducting National Environmental Policy Act (NEPA) review. The D.C. Circuit has now brought both decisions to bear on the Federal Energy Regulatory Commission’s (FERC) approval of a major liquefied natural gas (LNG) project and associated pipeline. Its opinion gives project applicants a better sense of which environmental judgments FERC can make for itself, what the Commission must explain, and how applicants can build a record capable of supporting those judgments.
Under Loper Bright, statutory ambiguity alone cannot support deference to an agency’s interpretation. Congress may, however, commit certain decisions to agency judgment. Courts must identify the boundaries of that authority, while the agency remains responsible for exercising the discretion Congress actually gave it. Loper Bright Enterprises v. Raimondo, 603 U.S. 369, 394–95, 412–13 (2024).
Congress had already amended NEPA in 2023, imposing new limits on the length and timing of environmental reviews and modifying other aspects of the process. Fiscal Responsibility Act of 2023, Pub. L. No. 118-5, § 321, 137 Stat. 10, 38–46. Seven County expressly applied NEPA as amended in 2023 and emphasized the fact-dependent judgments involved in determining the scope and depth of an environmental impact statement (EIS). Those judgments often draw on technical expertise and predictions about future effects, areas in which courts should afford agencies substantial latitude. Seven County Infrastructure Coalition v. Eagle County, 605 U.S. 168, 180–85 (2025).
Seven County also reaffirmed NEPA’s procedural role. NEPA requires an agency to assess environmental effects and consider that information in its decisionmaking, but it does not dictate the weight assigned to those effects or the agency’s ultimate decision. Judicial review therefore addresses the adequacy of the environmental analysis without converting NEPA into a substantive mandate.
For a Better Bayou, No. 24-1291, slip op. at 3–5 (D.C. Cir. Aug. 25, 2026), puts those principles into FERC practice. The case involved FERC’s approval of Venture Global’s CP2 LNG terminal and associated CP Express pipeline. Turning to FERC’s NEPA analysis, the court emphasized the discretion recognized in Seven County, calling deference the “bedrock principle” of NEPA review and repeating its recent observation that “the era of searching NEPA review is over.” Id. at 23.
The court applied that deference to FERC’s choice of air-quality methodology. Petitioners argued that FERC should have used a different method to evaluate the project’s air-quality effects. FERC supported its chosen approach with project-specific analysis and explained why the proposed alternative was less suitable. The court found that explanation sufficient and declined to decide which methodology it considered preferable. With FERC’s methodology connected to the environmental question and supported by the record, the court deferred to the Commission’s scientific and predictive judgment. For a Better Bayou, slip op. at 30–33.
A Strong Record Supports FERC’s Discretion and Greater Project Certainty
Applicants should anticipate the areas in which FERC will need to exercise judgment in its NEPA analysis and build the factual and technical record accordingly. Depending on the project, those issues may include geographic scope, baseline conditions, modeling assumptions, significance measures, treatment of related sources or effects, and limitations in available data. A well-supported application allows FERC to make its NEPA judgments on a developed factual and technical record, reducing the opportunity for those judgments to be second-guessed on judicial review.
FERC’s current NEPA procedures give applicants an opportunity to develop that record from the outset. In June 2025, FERC revised its NEPA implementing regulations and issued staff guidance calling for relevant environmental information to be identified and considered early in the process. The guidance also calls for coordinated, consistent, predictable, and timely environmental reviews. Removal of References to the Council on Environmental Quality’s Rescinded Regulations, Order No. 908, Docket No. RM25-11-000, 191 FERC ¶ 61,237 (2025); FERC, Staff Guidance Manual on Implementation of the National Environmental Policy Act 1 (June 2025). Applicants that identify the likely areas of FERC judgment and support them in the application are better positioned to move through that process with fewer unresolved NEPA issues.For a Better Bayou provides an early indication of how courts will review FERC’s NEPA judgments after Seven County. FERC’s revised procedures, meanwhile, show how the Commission is adapting its environmental review going forward. Together, they offer applicants greater certainty about both the development of FERC’s NEPA analysis and its treatment on judicial review. FERC retains substantial room to make project-specific judgments about scope and methodology, provided those judgments have factual and technical support. Applicants that develop that support from the outset give FERC a sound basis for its NEPA analysis and ultimate decision. If challenged, the resulting certificate is less susceptible to being overturned based on FERC’s NEPA analysis.