205 F.3d 403 (D.C. Cir. 2000)
ANR Pipeline Company, Petitionerv.Federal Energy Regulatory Commission, RespondentBP Exploration & Oil, Inc., et al., Intervenors
No. 99-1010
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 11, 2000Decided March 10, 2000

On Petition for Review of Orders of the Federal Energy Regulatory Commission
Daniel F. Collins argued the cause for petitioner.  With  him on the briefs were G. Mark Cook and Howard L. Nelson.
Monique Penn-Jenkins, Attorney, Federal Energy Regulatory Commission, argued the cause for respondent.  With her on the brief were Jay L. Witkin, Solicitor, and Timm L.  Abendroth, Attorney.  Susan J. Court, Special Counsel, entered an appearance.
Linda G. Stuntz argued the cause for intervenors Nautilus  Pipeline Company, L.L.C., et al.  With her on the brief were  Matthew Merrill Schreck, Frederick T. Kolb, Jon L. Brunenkant, Cheryl J. Walker, Charles Joseph McClees, Karol L.  Newman, and Robert C. Murray.  Lisa D. Harville entered  an appearance.
Before:  Silberman, Williams, and Ginsburg, Circuit  Judges.
Opinion for the Court filed by Circuit Judge Silberman.
Silberman, Circuit Judge:


1
ANR Pipeline Company petitions for review of an order of the Federal Energy Regulatory Commission (FERC) permitting a competitor to build and  operate a natural gas pipeline.  Insofar as ANR contends  FERC acted unreasonably in refusing to hold a comparative  hearing, we deny the petition.  And to the extent petitioner  raises environmental objections to FERC's decision, we conclude that it lacks standing and therefore dismiss the petition.

I.

2
ANR operates a natural gas pipeline system.  The system  takes gas from several different platforms, including Ship  Shoal Block 207 in the Gulf of Mexico off the coast of  Louisiana, where it receives gas from Manta Ray Offshore  Gathering Company.  It transports this gas to its onshore  compression station in Patterson, Louisiana.  From there, its  interstate pipelines deliver the gas directly to customers,  most of whom are in the Midwest, or to connections with  other pipeline systems for delivery elsewhere.


3
Manta Ray is owned by affiliates of Shell Offshore, Inc.,  Marathon Oil Company, and Leviathan Gas Pipeline Partners, L.P.  Affiliates of those three companies formed the  Nautilus Pipeline Company, L.L.C., to build a new pipeline  from Ship Shoal Block 207 to the onshore pipeline grid.  In  September 1996, Nautilus filed an application with the Commission under   7(c) of the Natural Gas Act for permission to  construct and operate 101 miles of 30-inch diameter pipe.The proposed line was to run from Block 207 to an onshore  station in Garden City, Louisiana.


4
A month later, ANR petitioned for a certificate under    7(c) for permission to expand the capacity of its existing  offshore system.  It sought to add about 37 miles of 30-inch  mainline loop, increasing its capacity to transport gas from  Block 207 to the mainland.  And then it promptly filed  motions in both the ANR and the Nautilus dockets to consolidate the two proceedings and set the projects for a comparative evidentiary hearing.  It argued that Ashbacker Radio  Corp. v. FCC, 326 U.S. 327 (1945), required a comparative  hearing because its application and the Nautilus application  were mutually exclusive.  Since it contended the capacity of  the Manta Ray system was not sufficient to supply gas to  both projects, ANR reasoned that the construction of one  project would preclude construction of the other.  It invoked  a 1968 FERC policy statement directing the Commission staff  to review applications to construct facilities in the Gulf "on  both a joint and individual company basis" with a view toward  promoting joint arrangements that would ensure the full  utilization of those facilities.  See 18 C.F.R.   2.65.  And it  raised as further support for a comparative hearing leading to  a choice of only one pipeline the National Environmental  Policy Act (NEPA), 42 U.S.C.   4321, et seq.


5
The Commission denied ANR's motion for consolidation  and a comparative hearing because in its view the two projects were not necessarily mutually exclusive and the public  interest could best be served by allowing market forces to  channel demand.  See Nautilus Pipeline Co., 78 F.E.R.C.  p 61,325 (1997);  ANR Pipeline Co., 78 F.E.R.C. p 61,326  (1997) ("ANR I").  It approved the Nautilus application,  allowing construction to begin.  At the same time it issued a  preliminary determination that ANR's application was also in  the public interest, subject to completion of an environmental  assessment.  ANR requested rehearing of both orders.  A  few days later it sought a stay of the order allowing Nautilus  to begin construction.  The Commission denied the stay, see Nautilus Pipeline Co., 79 F.E.R.C. p 61,151 (1998), and we  denied ANR's petition for a writ of prohibition and stay.  The  Commission ultimately granted ANR's certificate but denied  its motions for rehearing. See Nautilus Pipeline Co., 85  F.E.R.C. p 61,200 (1998);  ANR Pipeline Co., 85 F.E.R.C.  p 61,056 (1998) ("ANR II").  ANR petitioned for review of the  Commission's rulings in the Nautilus proceeding.1

II.

6
Petitioner claims that the Commission was obliged under  the Ashbacker doctrine to hold a comparative hearing before  it granted the Nautilus certificate.  But Ashbacker, which  involved a grant of a broadcast license by the FCC, applies  only if the certificates are, in fact, mutually exclusive.  In that  case both applications could not have been granted because  both petitioning companies could not broadcast on the same  frequency (two men on second base).  And "where two bona  fide applications are mutually exclusive the grant of one  without a hearing to both deprives the loser of the opportunity which Congress chose to give him."  Ashbacker, 326 U.S.  at 333.


7
Petitioner contends that Ashbacker is not limited to cases  of physical exclusivity but extends to situations in which  economic or other factors preclude the granting of both  licenses.  The Commission does not dispute this, at least  directly.  Instead, it responds that the applications of ANR  and Nautilus were not mutually exclusive;  indeed both were  granted.  ANR's substantive objection then is that the Commission unreasonably concluded that the projects were not  mutually exclusive.


8
The pipelines do run roughly parallel.  But "[m]any existing pipelines share similar routes while serving different  production areas and linking different fields."  ANR I, 78  F.E.R.C. at 62,405.  Here FERC found that the proposals  were not necessarily "dependent upon transporting the same  reserves or upon serving the same customers."  Id.  While the Commission recognized that Manta Ray could not deliver  enough gas to fill both the Nautilus pipeline and the ANR  expansion, it noted that ANR's system "accesses an area of  the OCS [Outer Continental Shelf] where ... large new gas  reserves are being developed."  ANR II, 85 F.E.R.C. at  61,177.  ANR is hardly in a position to dispute this finding,  for its own application asserted that "there are currently  under development significant new gas reserves" that will  lead to a "substantial increase in offshore production." Petitioner seems to argue that the Commission was not entitled  to look down the road, to consider further development in its  certificate proceeding.  But that contention runs afoul of the  specific language of   7(e) of the Natural Gas Act which  directs FERC to approve a project when it "is or will be  required by the present or future public convenience and  necessity."  15 U.S.C.   717f(e) (emphasis added).


9
The Commission recognized in issuing ANR's certificate as  well that "if the shippers of the additional reserves coming on  line find that ANR's project is attractive from an economic  standpoint, they will subscribe to ANR's project and assure  its ultimate success." ANR II, 85 F.E.R.C. at 61,177.  It  imposed an at-risk condition on ANR's certificate (as it had  on Nautilus's) so that the pipelines' customers would not bear  any of the risk associated with either project.  This approach  left ANR "free to compete with Nautilus and other projects  for markets and shippers," allowing ANR to "consider the  likelihood that market forces will respond to the need for  upstream feeder capacity that can move the additional gas  reserves being developed" in deciding whether to proceed  with construction.  Id.  Presumably, that leaves ANR in the  position of building its pipeline extension only when sufficient  demand justifies it, or when it can effectively wean existing  customers away from Nautilus.


10
To be sure, this leaves ANR at something of a disadvantage, for the Nautilus pipeline is already in place and serving  customers, because Nautilus filed its application first.  So it  might be thought that the short-term difficulty of competing  with an incumbent pipeline makes the two pipelines in some  sense exclusive.  But FERC seems at least implicitly to have concluded that this kind of economic disadvantage is different  from a situation in which economic factors make it possible to  grant only one license, so that Ashbacker does not apply here. We think its judgment was reasonable.


11
ANR protests the Commission's reliance on market  forces--even in this limited fashion--is inconsistent with the  premise of the Natural Gas Act.  It is up to the Commission,  not the market, to determine what is in the public interest. We do not understand, however, how the Commission could  determine the public interest without taking into account  future demand which is what the Commission means by  "market forces," nor do we think that the general language of    7(e) precludes FERC from encouraging competition.


12
It may well be that petitioner's more basic concern is that  competition will not really be free in this setting because  Nautilus is affiliated with Manta Ray.  "Due to the vertically  integrated nature of the Nautilus project," it argues, "it  cannot be assumed that the owner-shippers of Nautilus will  choose the least cost transportation alternative."  But Manta  Ray has the same incentive to minimize its shipping cost as  any other producer in the competitive market for natural gas  (petitioner does not claim that the downstream market is not  competitive).  Its owners would have no reason to build the  Nautilus pipeline if it would be cheaper for them to use  ANR's.  There is nothing inherently suspicious about the  vertical integration of Nautilus and Manta Ray.  Cf. Jack  Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698,  710-11 (7th Cir. 1984).


13
Even if FERC's decision is in conformity with its statutory  authority, ANR contends that 18 C.F.R.   2.65 required  FERC to hold a comparative hearing.  That provision states,  it will be recalled, that the Commission directs its staff to  review applications for construction of pipelines in the Louisiana offshore area "on both a joint and individual company  basis with a view toward the development of pipeline company gas exchange procedures that will minimize cross-hauls  and toward the promotion of joint use arrangements that will  assure the early full utilization of large capacity facilities in  the Outer Continental Shelf area."  It is argued that this section imposes "legal requirements that are designed to  foster the maximum use of these high-cost facilities," and that  the Commission unlawfully disregarded its own regulation.


14
The difficulty with this argument is that   2.65 is a policy  statement, not a regulation.  Tellingly, the section begins:  "It  will be the general policy of the Commission...."  It is not a  rule that is binding on FERC or the public--nor could it be,  for it was promulgated without notice and comment.  See  Order No. 363, 39 F.P.C. 925, 926 (1968) ("The statement  issued herein concerns a matter of general policy which does  not require notice or hearing" under the APA.).  A policy  statement does not become a regulation simply because an  agency chooses to publish it in the Code of Federal Regulations.


15
An agency may not of course depart from prior policy  without explanation.  But FERC explained how changed  circumstances justified a new policy.  It pointed out that the  "structure of the natural gas industry as well as the Commission's regulatory approach have undergone significant  changes" since   2.65 was promulgated.  ANR II, 85  F.E.R.C. at 61,176.  More specifically, it explained that new  technology has made it possible to produce gas from very  deep waters, giving access to reserves of gas that are much  larger than those available in the 1960s.  For that reason,  "[t]he challenge facing today's offshore industry is in establishing an infrastructure capable of transporting new OCS  production to diverse onshore markets rather than allocating  limited production among existing pipelines."  ANR I, 78  F.E.R.C. at 62,406.  It was entirely appropriate for the  Commission to change its regulatory approach in response to  technological changes in the industry.2

III.

16
ANR's remaining argument is that the Commission violated  NEPA by failing to conduct a comparative hearing.  NEPA requires agencies to evaluate the environmental impact of a  project as compared to its alternatives.  See 42 U.S.C.    4332(2)(C)(iii).  ANR contends that its project is a more  environmentally friendly alternative to that of Nautilus, and  one pipeline is environmentally better than two, so FERC  should have considered the two pipelines together before  approving either.  Although neither FERC nor the intervenor has questioned ANR's standing to raise this claim, we are  obliged to do so sua sponte.  See, e.g., De Jesus Ramirez v.  Reich, 156 F.3d 1273, 1276 (D.C. Cir. 1998).


17
The jurisdictional section of the Natural Gas Act provides  that "[a]ny party ... aggrieved by an order issued by the  Commission" may petition for review.  15 U.S.C.   717(b).To be "aggrieved," a party must assert an interest that is  arguably within the zone of interests intended to be protected  by the statute on which it relies.  See Association of Data  Processing Serv. Orgs. v. Camp, 397 U.S. 150 (1970).  NEPA,  of course, is a statute aimed at the protection of the environment.  But ANR has not alleged that it will suffer any  environmental injury as a result of the Commission's action. Indeed, it has not alleged that it has any interest in the  environment at all.  Its only concern is with suppressing  competition from Nautilus, and that economic interest is not  within the zone of interests protected by NEPA.  See Nevada  Land Action Ass'n v. United States Forest Serv., 8 F.3d 713,  716 (9th Cir. 1993);  cf. Competitive Enterprise Inst. v.  NHTSA, 901 F.2d 107, 123-24 (D.C. Cir. 1990) (informational  injury confers standing under NEPA only when the information sought relates to environmental interests).  We therefore  conclude that ANR lacks prudential standing to bring a  NEPA challenge to the Commission's action.


18
*  *  *  *


19
The petition for review is denied in part and dismissed in  part.


20
So ordered.



Notes:


1
 Nautilus has completed its pipeline--which would raise an interesting remedial question if we agreed with ANR.


2
 In light of the extensive changes in FERC's regulatory approach since 1968, we think that it might be appropriate for the  Commission to amend   2.65 to reflect its new policy.


