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CLNG Statement on DC Circuit Opinions Regarding LNG and NEPA Analysis

Today, the DC Circuit court issued two opinions that address the Sierra Club’s challenges to the Federal Energy Regulatory Commission’s (FERC) National Environmental Policy Act (NEPA) analysis of the Freeport and Sabine Pass LNG facilities.  In both opinions, the Court rejected Sierra Club’s challenges primarily because the Court finds that environmental objections to exporting LNG should be raised in the Department of Energy’s proceeding that authorizes the export of natural gas, not in FERC’s permitting of the facility.

Center for Liquefied Natural Gas Executive Director Charlie Riedl applauded the decision:

“Today’s rulings make clear that the existing NEPA process adequately and completely assesses the environmental impacts of LNG exports. The court found that attempts to draw the bounds of environmental analysis for purposes of citing and constructing an LNG facility outside the local impacts of a given facility are not valid.

“The consequence of these rulings is that the US LNG industry will continue to grow – creating jobs, tax revenue and economic growth across the country. Additionally, studies have shown that US LNG exports help promote the use of natural gas by our allies and trading partners, which, in turn, helps to lower global greenhouse gas emissions.”

Key findings from today’s rulings:

Case No. 14-1275 (Freeport)

“[The]Commission’s NEPA analysis did not have to address the indirect effects of the anticipated export of natural gas.  That is because the Department of Energy, not the Commission, has the sole authority to license the export of any natural gas going through the Freeport facilities.  In the specific circumstances where, as here, an agency “has no ability to prevent a certain effect due to” that agency’s “limited statutory authority over the relevant action[],” then that action “cannot be considered a legally relevant ‘cause’ of the effect” for NEPA purposes.” (Freeport p.16)

“In particular, the Commission found no evidence that the Projects by themselves would lead to increased gas production because “no specific shale-play [had] been identified as a source of natural gas for” the Projects. J.A. 1209.  More importantly, there was no evidence suggesting that the gas to be processed in the Freeport facility, independent of the export authorization, would “come from future, induced natural gas production, as opposed to from existing production, particularly in light of the longtime, extensive natural gas development that has already occurred in Texas, including in its shale areas.” Id. at 1270 (emphasis in original). Accordingly, the Commission concluded that the “potential environmental effects associated with additional natural gas production [were not] sufficiently causally related to the Freeport LNG Projects to warrant a detailed analysis.” (Freeport p. 17)

Case No. 14-1249 (Sabine Pass)

“The Commission adequately explained why it was not reasonably foreseeable that greater production capacity at the Terminal – separate and apart from any export activity – would induce additional domestic natural gas production.”  (Sabine p. 14)