USA - ‘Statutory rubber stamp’: FERC gas approvals face court battle
Court fights over proposed Gulf Coast gas export facilities are exerting new pressure on federal energy regulators to reevaluate whether it is in the public’s best interest to ship fossil fuels to foreign countries as the world confronts climate change.
The permitting process for liquefied natural gas facilities is different from other types of gas projects because the federal government has to sign off not only on construction of the facility itself, but also on the fuel’s destination. The Department of Energy is responsible for greenlighting LNG exports, and the Federal Energy Regulatory Commission approves siting and construction.
Advocacy groups are making their argument in at least three pending court cases that the authorization process is in serious need of a revamp.
“There’s a little bit of a buck-passing between the agencies,” said Sierra Club attorney Nathan Matthews, who has challenged numerous LNG export terminals in court.
“We want to litigate the fundamental question,” he said. “Is this in the nation’s interest?”
A lack of analysis is enshrined in at least part of the LNG approval process. DOE is required by Congress under the Natural Gas Act to greenlight gas exports to free-trade-agreement countries.
“It’s virtually a statutory rubber stamp,” said Megan Gibson, chief counsel at the Niskanen Center, which has litigated on behalf of property owners in the path of LNG projects.
LNG is gas that has been cooled to liquid form at minus 260 degrees Fahrenheit, drastically shrinking its volume and allowing it to be more easily stored and transported in specialized containers.
The United States is already the world’s largest LNG exporter, and gas shipments are expected to continue to increase, according to the U.S. Energy Information Administration. EIA anticipates total export capacity across North America will more than double by 2027, with U.S. terminals accounting for three-quarters of the new capacity.
While LNG’s supporters laud the fuel as important for U.S. economic and national security, the industry’s critics say expansion in the face of rising global greenhouse gas emissions is a mistake.
If LNG is bound for non-free-trade-agreement countries, DOE has discretion to decide whether exports are in the public interest, but the threshold for agency approvals is “rather low and not very well-defined,” Gibson said.
Meanwhile, Section 3 of the NGA tells FERC it can approve or deny an application for siting an LNG facility, but the statute doesn’t provide a legal standard for how to make that decision, said Jennifer Danis, federal energy policy director at the Institute for Policy Integrity.
As a result, FERC has tended to follow DOE’s determination that projects should move forward, and courts have gone along with that approach.
However, Danis said FERC should place less emphasis on DOE’s decisionmaking and give greater weight to factors like environmental justice and climate impacts.
“Because the structure of Section 3 breaks the export approval determination apart from the facilities siting question, it would make sense that FERC’s and DOE’s determinations require very different inquiries,” Danis said in an email.
Neither agency responded to requests for comment about their approach to approving LNG facilities.
In addition to climate risk, LNG development often leads to wetland loss and diminished coastal resilience to hurricanes, said Matthews of the Sierra Club. And LNG facilities are most likely to be located near low-income communities of color that already face disproportionate exposure to pollution.
“Looking at the whole life cycle, it is contrary to the public interest,” said Matthews. “It’s locking us into fossil fuels for another 20 or 30 years when we need to be ramping down our use.”
Critics of the current system for LNG export approvals say they do not see the federal government’s approach changing without intervention from the courts.
In July, DOE rejected a petition first filed in 2013 by the Sierra Club and the Center for Biological Diversity, requesting that the agency create regulations for deciding whether exports are in the public interest. DOE’s response only came after the groups sued to force the agency to address their request.
On Nov. 14, Democratic Sen. Jeff Merkley of Oregon and 65 other lawmakers signed a letter to DOE, calling on the agency to revamp what they said was its “outdated and insufficient methods of measuring climate impacts.”
