Court rejects Sierra Club challenges of DOE’s Freeport LNG findings

A federal appeals court in Washington rejected the Sierra Club’s contention that US Department of Energy authorizations for the Freeport, Tex., liquefied natural gas project’s plans to export LNG inadequately considered environmental consequences. Oil and gas groups immediately welcomed the US Appeals Court for the District of Columbia’s Aug. 15 decision.

A federal appeals court in Washington rejected the Sierra Club’s contention that US Department of Energy authorizations for the Freeport, Tex., liquefied natural gas project’s plans to export LNG inadequately considered environmental consequences. Oil and gas groups immediately welcomed the US Appeals Court for the District of Columbia’s Aug. 15 decision.

The organization argued that DOE should have considered indirect environmental consequences under the National Environmental Policy Act from the production and use of the gas that would be liquefied and exported. It also said that DOE should have considered additional variables when it authorized Freeport LNG’s exports to countries not having a free trade agreement with the US under the Natural Gas Act.

The court ruled otherwise in both instances in a decision written by Judge Robert L. Wilkins. He essentially affirmed earlier court findings that the Federal Energy Regulatory Commission was the lead agency in conducting NEPA environmental reviews for LNG export projects and said the additional analysis the Sierra Club sought from DOE would be impractical and unduly expensive.

The ruling also rejected additional reviews of possible indirect environmental impacts in non-FTA countries where Freeport and other exporters’ LNG would be used as exceptionally difficult to determine and agreed with DOE’s argument that Section 3 of the Natural Gas Act “is too blunt an instrument to address [the Sierra Club’s] environmental concerns efficiently.”

Several Washington oil and gas association officials applauded the court’s findings on Aug. 15.

American Petroleum Institute Executive Vice-Pres. and Chief Strategy Office Martin J. Durbin said the decision affirms a predictable and reasonable permitting process for additional LNG export facilities across the country. “Moving forward, we must put in place smart, common-sense regulations that will continue to drive innovations in technology that will increase opportunities for American LNG throughout the world,” he recommended.

Durbin noted that the US Energy Information Administration reported earlier in August that the US exported more gas than it imported in 3 of this year’s first 5 months—February, April, and May—which is historic since it has been a net importer on an average annual basis for nearly 60 years. In addition, EIA projects that the US will be a net gas exporter for the year in 2017, he said.

Charlie Riedl, the Center for Liquefied Natural Gas’s executive director, noted that the court’s earlier rejection of the Sierra Club’s argument and its explanation of why DOE adequately considered environmental impacts “is encouraging for the LNG industry and the thousands of jobs it entails.

“Natural gas exports can deliver meaningful decreases in global greenhouse gas emissions, help balance trade, provide geopolitical stability, and support good paying jobs at home,” he continued. “Exporting LNG offers many different opportunities, and decisions like this from the DC Circuit Court continue to pave the way for the US economy to benefit.”

Fred H. Hutchison, executive director of LNG Allies and Our Energy Moment, said that the court “once again sensibly rejected the specious arguments advanced by the Sierra Club challenging federal authorizations of US LNG exports.

“If anyone had any serious doubt that either FERC or DOE regulatory regimes sufficiently consider the environmental effects of American LNG exports, that doubt was surely erased today,” he maintained.

Contact Nick Snow at nicks@pennwell.com.

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