FERC has been ordered by a federal appeals court to review its analysis of the environmental impact of Commonwealth LNG, creating another potential delay for the Louisiana export project.
A coalition of environmental groups has challenged the Federal Energy Regulatory Commission’s authorization of the 9.3 million metric tons/year (mmty) liquefied natural gas project on the grounds that the Commission did not determine whether its associated emissions would have significant impact on the environment.
On Tuesday, the U.S. Court of Appeals for the District of Columbia Circuit agreed that FERC had not properly explained its decision, especially in comparison with other cases, and should revisit its assessment of greenhouse gas (GHG) emissions.
[In the Eye of the Storm: North American LNG project developers continue to grapple with the Biden administration's pause on non-FTA permits. Has the pause given impetus to other projects? How are Mexico LNG projects advancing? Tune in to hear from LNG industry analyst Sergio Chapa in the latest episode of NGI's Hub & Flow.]
“Because the Commission failed to adequately explain why it could not determine the significance of the project’s GHG impacts and failed to properly consider the cumulative effects associated with the project’s nitrogen dioxide emissions, it must also reevaluate its public interest determination…,” Judge Brad Garcia wrote in the court’s opinion.
Commonwealth LNG has had FERC’s approval for construction since 2022, but regulatory uncertainty around its export license has led to development delays. The company’s request to export LNG cargoes worldwide was paused since January following the U.S. Department of Energy’s policy review.
Before the DOE pause, Commonwealth had placed around one-half of its export capacity under contract with international buyers and U.S. production companies. It had previously targeted a final investment decision (FID) for early 2024 with first exports sometime in 2027.
First cargoes are now projected in 2028 – if Commonwealth reaches a positive FID in the first half of next year.
Eagle Ford Shale-focused Kimmeridge Texas Gas LLC (KTG) recently boosted its equity ownership in the proposed project and took control of Commonwealth LNG LLC. Project partners have targeted FID by the middle of 2025.
With the latest remand decision, environmental groups are furthering their streak of wins in federal appeals courts. In 2021, the DC Circuit remanded FERC’s approval of Rio Grande LNG, Texas LNG and related pipeline projects almost two years after the Commission rendered its decision. FERC reaffirmed those approvals last year.
Texas environmental group Port Arthur Community Action Network also received a win last year when the U.S. Court of Appeals for the Fifth Circuit vacated a state air permit for Sempra Infrastructure’s Port Arthur LNG. The case has been referred to the Texas Supreme Court.
On the other hand, environmental groups have had less luck intervening in federal decisions to expand LNG export capacity at specific terminals. Also on Tuesday, DC appellate judges rejected the Sierra Club’s lawsuit against the DOE for denying a rehearing in capacity decisions for Golden Pass LNG and Magnolia LNG.
Judge Gregory Katsas wrote in the opinion that Sierra Club failed to prove one of its southeast Texas members had standing in the decision and how boosting the non-FTA export authorization at Golden Pass to 937 Bcf/y would impact the environment.
