Department of Energy, not FERC, should review upstream impacts of LNG terminals – court rules

LNG terminal
Source: WikiCommons

The Department of Energy, rather than the Federal Energy Regulatory Commission, should tackle the task of conducting upstream environmental impacts assessments related to the construction of new liquefied natural gas (LNG) export facilities. This was the ruling of the D.C. Circuit Court of Appeals yesterday in response to a challenge brought by the Sierra Club.

The case involved two LNG terminals on the Gulf Coast, one in Sabine Pass, Louisiana and the other in Freeport, Texas. The Sierra Club sued the Federal Energy Regulatory Commission claiming the agency violated the National Environmental Policy Act by not conducting an environmental review that takes into consideration the upstream impacts of natural gas production. In response to the claim, the court ruled that if the upstream impacts of gas development are to be assessed, this would be the job the Department of Energy, which has to approve LNG exports, rather then FERC.

The Sierra Club, along with the Chesapeake Climate Action Network, the Patuxent Riverkeeper and EarthReports Inc. also contested the FERC’s decision to reject their appeal to consider the upstream impacts of exporting LNG with regard to the Cove Point LNG plant in Lusby, Maryland. That case before the D.C. circuit is still pending.

Attorney Moneen Nasmith, with the environmental law firm Earthjustice, who is representing the Sierra Club in the Cove Point case, although not in the Sabine Pass or Freeport case, told State Impact:

“Those decisions are disappointing and reflect a fundamental misunderstanding of the way NEPA is supposed to work, (…) What that ultimately means for getting the analysis of Cove Point that we’ve been asking for remains to be seen.”

Sierra Club argues that the Cove Point facility has unique environmental challenges that need to be taken into consideration. Among others, the facility is based across the street from a residential neighbourhood.

Despite the environmentalists’ challenge, Dominion, the company involved in building and operating the $3.8 billion project, is optimistic about its future.

“The FERC has denied prior appeals to stop the project,” said Dominion spokesman Karl Neddenien in an email. “Approval also has consistently been upheld in the courts as well as by federal and state regulators, so we expect a similar outcome.”

Maryland’s Cove Point LNG terminal is expected to export 350,000 MMBtu of Marcellus Shale gas per day for 20 years once it’s completed in late 2017

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