The Federal Energy Regulatory Commission (FERC) has issued a draft policy statement proposing significant changes to its review of operational air quality effects under the National Environmental Policy Act (NEPA). The Commission would no longer ordinarily require air dispersion modeling for natural gas projects, including compressor stations and liquefied natural gas (LNG) facilities. Instead, it would assess operational emissions using equipment-specific estimates, qualitative information, and applicable Clean Air Act (CAA) requirements.[1]
The change extends beyond reducing application requirements. FERC also proposes that compliance with applicable CAA permitting and regulatory requirements generally supports a finding that operational air emissions are not "significant" for NEPA purposes and therefore would not, standing alone, warrant an environmental impact statement (EIS). That proposed presumption would not foreclose consideration of project-specific circumstances. The policy would address facilities reviewed under sections 3 and 7 of the Natural Gas Act (NGA).[2]
Eliminating Routine Air Dispersion Modeling
Under existing practice, FERC typically requests dispersion modeling for new or modified compressor stations and LNG facilities. That modeling estimates local pollutant concentrations by accounting for atmospheric conditions, nearby emission sources, and existing ambient pollution and compares projected concentrations against national air quality standards. Although Commission regulations do not expressly require this modeling in every case, it has effectively become an application requirement through staff guidance and practice.[3]
Under the proposed approach, applicants would continue to identify emission-producing equipment and provide emissions factors for criteria pollutants, hazardous air pollutants, and greenhouse gases, along with information concerning controls and mitigation measures. Staff would estimate operational emissions and discuss their effects in NEPA documents, using that and other available information. Applicants could voluntarily submit dispersion modeling prepared for state air permitting, which FERC proposes to evaluate as additional context rather than disregard.[4]
Greater Reliance on Clean Air Act Compliance
FERC reasons that EPA and state air agencies already regulate stationary-source emissions through CAA permitting, air quality standards, and emissions controls. The Commission concludes that its separate modeling analysis can duplicate, exceed, or conflict with state permitting requirements without materially influencing authorization decisions. FERC notes that it is unaware of any NGA section 3 or 7 application denied, in whole or in part, because of operational air quality impacts.[5]
The Commission therefore proposes generally to treat compliance with applicable CAA requirements as supporting a determination that operational air quality effects are less than significant under NEPA. This would not remove the obligation to disclose reasonably foreseeable adverse air quality effects, eliminate other grounds for preparing an EIS, or excuse applicable CAA permits. Nor would it alter the Commission's separate General Conformity obligations.[6]
Judicial Precedent and the Durability of FERC's Policy
FERC relies on the Supreme Court's decision in Seven County Infrastructure Coalition v. Eagle County, which requires substantial judicial deference to reasonable agency judgments about the depth and breadth of NEPA analysis. Other courts have accepted use of Clean Air Act standards in project-specific NEPA reviews. In City of North Miami v. FAA, the Eleventh Circuit upheld an air-quality significance determination supported by a finding of de minimis impacts under the CAA; in Sierra Club v. FHWA, a district court upheld an EIS that considered air quality through the CAA framework. Neither decision establishes a categorical rule that CAA compliance alone satisfies NEPA or directly resolves whether FERC may generally forgo dispersion modeling for NGA facilities.[7]
Guidance Rather Than a Binding Regulation
FERC has issued a draft policy statement rather than a legislative rule. A general policy statement ordinarily announces an agency's intended approach without binding it in future individual proceedings; the Commission must still support its application of that approach in the record of each case. A future Commission could revise or withdraw the guidance. The Supreme Court's Seven County decision affords substantial deference to reasonable judgments about the level of NEPA analysis but does not prescribe FERC's proposed approach to operational air quality.[8]
Existing decisions provide some support for use of CAA standards in NEPA analysis, but do not eliminate litigation risk concerning localized emissions. Applicants should consider whether voluntarily providing existing modeling would strengthen the record for a project with unusual local air quality conditions. FERC's proposal preserves that option and does not alter its separate General Conformity obligations.
Related LNG Authorization Proposal
In a separate October 15 notice of proposed rulemaking, FERC proposed, but has not adopted, a blanket authorization program under which eligible LNG activities could proceed automatically or through 60- or 90-day prior-notice procedures. The LNG initiative addresses whether qualifying projects would need individual NGA authorization orders; the NEPA policy concerns FERC's proposed method of assessing operational air quality effects in environmental reviews. Neither proposal eliminates otherwise applicable environmental or safety requirements.[9]
Issues for Comment
Interested parties should consider commenting on the proposed treatment of state air-permitting materials, voluntarily submitted dispersion modeling, and unusual site-specific conditions. The Federal Register notice requests comments on implementation, with submissions due by 5:00 p.m. Eastern Time on November 16, 2026, in Docket No. PL26-3-000.[10]
Key Takeaway
FERC's draft policy could simplify environmental review of NGA facilities by ending routine air dispersion modeling and placing greater weight on CAA compliance in NEPA significance determinations. It is not a final regulation, and existing cases do not foreclose a challenge to its application in a particular proceeding. Developers should consider whether voluntary site-specific information will improve the defensibility of their projects and whether to submit implementation comments by November 16, 2026.
Venable's Energy and Environmental Groups work together to assist developers in obtaining FERC and Department of Energy approvals for LNG facilities, natural gas pipelines, and other energy infrastructure. Our integrated team advises on NGA authorization, NEPA review, Clean Air Act permitting, agency coordination, and related litigation, helping clients build an effective administrative record and defend project approvals.
[1] Env't Rev. of Nat. Gas Act Applications, 197 FERC ¶ 61,037, PP 1–5, 35 (2026) ("Draft Policy Statement").
[2] Id. at PP 6, 37–39; 15 U.S.C. §§ 717b, 717f.
[3] Draft Policy Statement, 197 FERC ¶ 61,037, PP 13–15.
[4] Id. at PP 33–36.
[5] Id. at PP 17, 21–28.
[6] Id. at PP 5, 14 n.37, 37–39.
[7] Seven Cnty. Infrastructure Coal. v. Eagle Cnty., 605 U.S. 168, 181–84 (2025); City of N. Miami v. Fed. Aviation Admin., 47 F.4th 1257 (11th Cir. 2022); Sierra Club v. Fed. Highway Admin., 715 F. Supp. 2d 721 (S.D. Tex. 2010).
[8] See Pac. Gas & Elec. Co. v. Fed. Power Comm'n, 506 F.2d 33, 38 (D.C. Cir. 1974) (distinguishing general statements of policy from binding substantive rules); Seven Cnty., 605 U.S. at 181–84.
[9] FERC, FERC Takes Historic Action Launching First LNG Authorization Program 1 (Oct. 15, 2026) (news release), Docket No. RM26-2-001.
[10] FERC, FERC Launches NEPA Overhaul to Accelerate Natural Gas Projects 1 (Oct. 15, 2026) (news release), Docket No. PL26-3-000.