Appeals Court OKs Gas Export Terminal in Texas

(CN) – The D.C. Circuit on Tuesday rejected an environmental watchdog’s challenge to a liquefied natural gas export terminal on the Texas Gulf Coast, finding that the Energy Department conducted the required environmental reviews before approving the project.

Energy companies including FLNG Liquefaction 2 LLC and Freeport LNG Expansion LP applied for a permit in 2011 to export liquefied natural gas through a proposed terminal on Quintana Island in Brazoria County, Texas.

The Department of Energy granted the exporters’ application in 2014 after determining that their proposal complied with the National Environmental Policy Act, or NEPA, and the Natural Gas Act, according to the D.C. Circuit’s ruling issued Tuesday.

The energy companies also had to apply for export permits individually, which the Energy Department also granted.

The Sierra Club challenged those approvals, claiming the government fell short of its obligations under both federal laws.

The environmental watchdog group specifically argued that the Energy Department did not sufficiently examine the indirect effects of liquefied natural gas exports, such as those related to a likely increase in natural gas production and usage and the cumulative effects of other export projects.

Rejecting the Sierra Club’s petition for review, the D.C. Circuit agreed Tuesday with the Energy Department’s argument that the type of analysis the environmental group wants “would be too speculative and, in any event, unhelpful to its decisionmaking.”

“The Department offered a reasoned explanation as to why it believed the indirect effects pertaining to increased gas production were not reasonably foreseeable,” U.S. Circuit Judge Robert Wilkins wrote for a unanimous three-judge panel. “More importantly, even if the Department could make reasonable projections about the quantity of export-induced gas production, the Department was stumped by where, at the local level, such production might occur.”

The appeals court cited multiple studies conducted on Freeport’s proposal.

An impact statement released by the Federal Energy Regulatory Commission, which was adopted by the Energy Department, “disclosed and analyzed direct, indirect, and cumulative impacts from the construction and operation of the proposed liquefaction and export facilities,” according to the ruling.

The government also commissioned the National Energy Technology Laboratory in 2014 to assess the gas export terminal’s impact on global greenhouse-gas emissions, the ruling states. Its report found that exporting U.S. liquefied natural gas to produce power in Europe and Asia “would not increase greenhouse-gas emissions compared to regional coal power.”

Judge Wilkins said in the ruling that it was okay for the government to generalize environmental impacts based on the assumption that increased gas production could occur anywhere across the country.

“We cannot say that the Department failed to fulfill its obligations under NEPA by declining to make specific projections about environmental impacts stemming from specific levels of export-induced gas production,” the judge wrote in the 25-page opinion.

Sierra Club staff attorney Nathan Matthews said in a statement Tuesday that the group is “disappointed with the Court’s refusal to require DOE to use available tools to inform communities of the impact of this additional fracking prior to approving exports.”

“The court, DOE, and communities across the country all agree that exporting [liquefied natural gas] will mean more fracking, and more of the air and water pollution that goes with it,” Matthews said.

Energy Department spokesperson Jess Szymanski said in a statement, “The Department is moving forward with responsible natural gas policies that are in the public interest, and is pleased to hear of the Court’s decision upholding DOE’s export authorization and environmental  analysis in this case.”

Judge Robert Wilkins, who was appointed by former President Barack Obama in 2013, was joined on the panel by U.S. Circuit Judges David Sentelle and Karen LeCraft Henderson.

Sentelle, a senior judge, was appointed by Ronald Reagan, while Henderson is an appointee of George H. W. Bush.


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