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    Home > News > Gas News > News Article

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    FERC Chairman Glick Issues Statement on Commonwealth LNG


    November 18, 2022 - Targeted News Service

     

      WASHINGTON, Nov. 18 -- The U.S. Department of Energy's Federal Energy Regulatory Commission issued the following statement by Chairman Richard Glick on a decision (Docket Nos. CP19-502-000, CP19-502-001) on Nov. 17, 2022, involving Commonwealth LNG LLC:

      * * *

      I concur with the Commission's decision to grant, pursuant to section 3 of the Natural Gas Act (NGA),[1] Commonwealth LNG, LLC's (Commonwealth) requested authorization to construct and operate the Commonwealth LNG project.

      I write separately, however, because I am concerned that section 3 of the NGA does not provide a sufficient framework for consideration of the adverse impacts associated with a proposed LNG facility. Under section 7 of the NGA, when the Commission determines whether to grant a certificate of public convenience and necessity for a proposed interstate gas pipeline, we essentially make two findings: whether the project is needed and, if so, whether it is in the public interest. As the courts have noted, this latter determination requires us to consider "all factors bearing on the public interest,"[2] which we do by weighing the project's benefits against its potential adverse impacts. For LNG export or import facilities, however, the Department of Energy determines whether the export or import is consistent with the public interest.[3] The Commission's review is limited to considering whether the construction and operation of the import/export facilities would be consistent with the public interest, with the statutory presumption that the facilities are consistent with the public interest.[4] Under that bifurcated framework, it is not clear how we are supposed to weigh a project's adverse impacts when the public interest determination as to the LNG export or import is outside our jurisdiction.

      Here, the Environmental Impact Statement (EIS), while acknowledging that the Commonwealth LNG project operation will result in CO2 emissions in excess of 3.5 million tons per year, fails to conclude whether these emissions would have a significant impact on the environment. In my view, the Commission should have assessed whether the project's CO2 emissions are significant. The Commission in Northern Natural already demonstrated it could do so.[5] Considering the significance of a reasonably foreseeable adverse impact would also make the Commission's order more legally durable, should a protesting party challenge the Commission's decision in court.

      Climate change poses an existential threat to our security, economy, environment, and, ultimately, the health of individual citizens. Unlike many of the challenges that our society faces, we know with certainty what causes climate change: It is the result of GHG emissions, including carbon dioxide and methane--which are released in large quantities through the production and the consumption of natural gas. Given that, it is critical that, consistent with our statutory authority, we fully consider a project's contribution to climate change as part of our public interest determination. In my opinion, it is readily apparent that the Commonwealth LNG project's operational CO2 emissions, which are projected to exceed 3.5 million tons per year (the equivalent of the annual GHG emissions of nearly 700,000 automobiles[6]), will significantly impact the environment. As the EIS notes, these emissions will increase Louisiana's CO2 emissions nearly 2 percent over 2019 levels.[7]

      In addition, Commonwealth sits in southwest Louisiana, an area of the country with several environmental justice communities and a long history of heavy industrialization, with the attendant consequences for those surrounding communities. Indeed, many of the communities in the area exhibit rates of cancer, asthma, and other serious ailments that are well above the national average.[8] I believe that the Commission has both a legal and moral obligation to seriously consider the impacts of any facility it sites in these communities, including both the impacts directly attributable to the facility itself and cumulatively along with other facilities in the area. Today's order adopts the conclusion in the EIS that the facility will have significant visual impacts on certain surrounding environmental justice communities. And while I agree with that conclusion, I believe we must also continue to revise and refine our approach to environmental justice to ensure that we are adequately identifying all adverse impacts for environmental justice communities, mitigating them to the extent possible, and then seriously considering them in our public interest analysis.

      Bearing those considerations in mind, this order aptly illustrates the dilemma we face under NGA section 3. We have what is clearly, at least in my opinion, a significant adverse impact in the form of 3.5 million tons of GHGs, but the potentially countervailing benefit to that adverse impact, namely the export of natural gas, falls outside our jurisdiction. Under that circumstance, it is not at all clear how the Commission is supposed to adequately assess the public interest, including the adverse impacts, without also considering the actual export and import, which Congress did not give this Commission jurisdiction to consider within our public interest determination. On the one hand, I find it difficult to believe that the Commission can consider only the adverse impacts associated with a section 3 facility and not the benefits the export or import may provide, as that would seem to tilt the public interest determination against the facility, which would be at least philosophically inconsistent with the standard of review, which as noted favors approval of the facility. On the other though, the courts have made clear that a section 3 facility's adverse impacts, including with respect to climate change and environmental justice, must be part of public interest determination under section 3 and inquiry that fails to seriously weigh those factors would also be legally suspect.[9]

      That uncertainty creates a challenging situation, to put it mildly, for all stakeholders, including the Commission. After all, surely there is a degree of adverse impact so great that the public interest requires the Commission to reject a section 3 application. But without a clear framework for making that determination in light of the substantial benefits that LNG exports can provide (after all, Congress deemed exports to our free trade partners to be categorically in the public interest), there is unavoidable uncertainty regarding how the Commission can and should weigh adverse impacts. When it comes to infrastructure that costs billions of dollars and impacts the surrounding community and the environment more generally, uncertainty is bad for everyone. For that reason, I believe it would be beneficial for Congress to clarify how the Commission is supposed to weigh the public interest factors under section 3, including the benefits provided by imports and exports of LNG.

      For these reasons, I respectfully concur.

      * * *

      Footnotes:

      [1] 15 U.S.C. Sec. 717b(a).

      [2] Atl. Refining Co. v. Pub. Serv. Comm'n of N.Y., 360 U.S. 378, 391 (1959).

      [3] 42 U.S.C. Sec. 7151(b); see also 15 U.S.C. Sec. 717b(c) (stating that exports of natural gas "to a nation with which there is in effect a free trade agreement . . . shall be deemed to be consistent with the public interest").

      [4] See EarthReports, Inc. v. FERC, 828 F.3d 949, 953 (D.C. Cir. 2016) ("Under NGA Sec. 3, an LNG proposal shall be authorized unless the proposal will not be consistent with the public interest, while under NGA Sec. 7 a finding must be made that a proposal is or will be required by the present or future public convenience and necessity; NGA Sec. 3, unlike Sec. 7, sets out a general presumption favoring such authorization.") (cleaned up).

      [5] N. Nat. Gas Co., 174 FERC Sect. 61,189, at P 32 (2021). As I have previously stated, this is something we regularly do with respect to myriad different environment impacts. See, e.g., Columbia Gulf Transmission, LLC, 180 FERC Sect. 61,206 (2022) (Glick, Chairman, concurring at P 4); Tenn. Gas Pipeline Co., 179 FERC Sect. 61,041 (2022) (Glick, Chairman, concurring at P 5 & nn.190-93).

      [6] This figure was calculated using the U.S. Environmental Protection Agency's Greenhouse Gas Equivalencies Calculator. See U.S. Envtl. Prot. Agency, Greenhouse Gas Equivalencies Calculator, https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator (last visited Nov. 15, 2022).

      [7] Final Environmental Impact Statement, Docket Nos. CP19-502-000, et al., at 4-396 (Sept. 2022).

      [8] See Kimberly A. Terrell & Gianna St. Julien, Air Pollution Is Linked to Higher Cancer Rates Among Black or Impoverished Communities In Louisiana, Environ. Res. Lett. 17 (Jan. 2022), available at: https://iopscience.iop.org/article/10.1088/1748-9326/ac4360/pdf.

      [9] Vecinos para el Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321, 1331 (D.C. Cir. 2022).

      * * *

      Original text here: https://www.ferc.gov/news-events/news/c-2-chairman-glick-concurrence-regarding-commonwealth-lng-llc

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