EPA May Be Trying to Slow LNG Export Drive

With three recent requests to the Federal Energy Regulatory Commission (FERC), the Environmental Protection Agency (EPA) has signaled it may seek to slow the recent drive to export liquefied natural gas (LNG).

Three times this year, the Texas regional office of the EPA has asked FERC to consider wider impacts of increased greenhouse gas emissions that may result from LNG development and increased natural gas demand. The first request came in March, when it submitted comments to FERC on the proposed Cameron LNG export terminal in Cameron Parish, La.

The EPA asked FERC to “consider the extent to which implementation of the proposed project could increase the demand for domestic natural gas extraction, as well as potential environmental impacts associated with the potential increased production of natural gas.”

FERC approved the Cameron project in June, but the EPA on July 28, and again on Aug. 4, submitted similar comments on Phase II of the Freeport LNG project and Cheniere Energy’s proposed export terminal in Corpus Christi, Texas. Those projects are still awaiting Department of Energy (DOE) and FERC approval.

The EPA also raised concerns of environmental justice, suggesting that the three projects might have disproportionate impacts on minority communities and complaining that FERC appeared to ignore previous comments the EPA made on the subject.

In each set of comments, the EPA further stated that this inquiry was mandated under the National Environmental Policy Act (NEPA), which requires consideration of indirect effects when there is a close causal relationship. It also suggested that FERC environmental impact statements (EISs) on the projects were deficient because they failed to fully consider these issues.

The actions are ominous for supporters of LNG exports because environmental groups such as the Sierra Club have made the same argument with FERC for all of the export projects that have recently been proposed. FERC has previously stated that these wider effects are not relevant to its review process under the Natural Gas Act, but the EPA’s move could add weight to the opposition.

The DOE earlier this year announced a move to “streamline” the approval process, but one of the changes required completion of an EIS before approval, which critics said would actually slow the process down. Though FERC has the last word on LNG exports, and the EPA does not have the power to directly block them, the actions appear to signal the EPA’s intent to involve itself in developing the EISs. That could potentially delay their approval depending on how FERC chooses to address the EPA’s concerns.

There are currently 26 LNG export applications awaiting DOE and FERC approval for export to countries without free-trade agreements with the U.S., according to DOE data. Eight projects have received permission to proceed.

—Thomas W. Overton, JD is a POWER associate editor.