On February 21, 2019, FERC took “a new approach” to its approval of pending FERC-jurisdictional liquefied natural gas (“LNG”) projects by calculating the direct greenhouse gas (“GHG”) emissions from the operation of the project facilities and comparing those emissions to the national level. FERC’s approach was a step toward ultimately approving a proposed LNG project that was previously pulled from FERC’s December 2018 open meeting. Notwithstanding FERC’s approval, Commissioner Cheryl LaFleur reiterated her concern that while FERC’s disclosure of national comparison data is only the first step, “the Commission has not identified a framework for making a significance determination” based on GHG emissions. Meanwhile, Commissioner Richard Glick dissented, arguing that FERC’s GHG analysis fails to meet the requirements of both the Natural Gas Act (“NGA”) and the National Environmental Policy Act (“NEPA”), both of which require that FERC consider climate change implications in some manner. Separately, FERC approved two smaller gas pipeline projects, with Commissioner LaFleur issuing separate concurrences, and Commissioner Glick issuing separate dissents, in each.
In September 2015, Venture Global Calcasieu Pass, LLC and TransCameron Pipeline, LLC (jointly, “Applicants”) filed an application to site, construct, and operate a new LNG export terminal and related facilities (together the “Export Terminal”), in Cameron Parish, Louisiana designed to process up to 12 million metric tons of natural gas annually. On October 22, 2018, FERC Staff issued the final Environmental Impact Statement (“EIS”) for the Export Terminal. Shortly thereafter, in December 2018, Commissioner Neil Chatterjee postponed the Export Terminal from FERC’s consent agenda before FERC’s monthly open meeting.
In now approving Applicants’ project, FERC noted that the final EIS calculated the direct GHG emissions from the Export Terminal. FERC also explained that the EIS disclosed that the project has the potential to directly emit almost four million metric tons of carbon dioxide per year, compared those emissions to the national level of GHG emissions, and found that the direct operational emissions of the Export Terminal could potentially increase national emissions by 0.07 percent and will contribute incrementally to climate change. However, FERC reiterated a prior conclusion that it cannot determine a project’s “incremental physical impacts on the environment caused by GHG emissions . . . .” FERC added that it has previously found that “it could not determine whether a project’s contribution to climate change would be significant.” Ultimately, FERC concluded that the Export Terminal is environmentally acceptable and not inconsistent with the public interest.
In her concurrence, Commissioner LaFleur expressed her appreciation that the Commission disclosed the direct GHG emissions from the Export Terminal and “provided important context by comparing them to the national GHG emissions inventory.” However, Commissioner LaFleur continued to urge FERC to monetize climate damages as part of its analysis by using the Social Cost of Carbon tool as a way to assess indirect impacts caused by GHG emissions. Meanwhile, Commissioner Glick argued in his separate dissenting opinion that FERC’s analysis “effectively writes climate change out of the public interest determination entirely.” According to Commissioner Glick, FERC’s choice not use the Social Cost of Carbon as a tool to achieve its evaluation of GHG emissions is arbitrary and capricious and as a result, he could not support the project.
In addition, on February 21, 2019, FERC approved two separate gas pipeline projects proposed by Portland Natural Gas Transmission System (“Portland”) and Northern Natural Gas Company (“Northern”), respectively. In each order, FERC issued certificates based on its analysis of the Environmental Assessment (“EA”) for each pipeline project. According to FERC, neither project constituted a major federal action which would require FERC to develop an EIS and conduct a more detailed and rigorous review of the projects. In response to each order, Commissioner LaFleur wrote a concurrence and expressed her disagreement with FERC’s failure to identify a framework for reaching a significant determination on GHG emissions. Regarding FERC’s order on the Northern pipeline project, Commissioner LaFleur acknowledged that, while FERC quantified and considered the downstream emissions in its decision, FERC must adopt a metric to assess the significance of GHG emissions. In FERC’s order on the Portland pipeline project, Commissioner LaFleur considered the downstream impacts of the projects in lieu of FERC having made this assessment. Commissioner Glick issued a separate dissent in each proceeding expressing disapproval of FERC’s GHG analysis. In each, Commissioner Glick argued that FERC’s decision to not consider whether the contribution to climate change from GHG emissions would be significant contravenes its obligations under the NGA and NEPA.
A copy of FERC’s order related to the Export Terminal is available here. A copy of FERC’s press release regarding the Export Terminal is available here. Copies of FERC’s Portland and Northern certificate orders are available here and here.