• Natural Gas News

    Commissioner Objects to Ferc Approval of Freeport LNG Expansion

Summary

Regulator abrogated its environmental responsibilities, commissioner says

by: Dale Lunan

Posted in:

Natural Gas and LNG Latest & Breaking News, Americas, Liquified Natural Gas (LNG), Political, Environment, Regulation, Infrastructure, News By Country, United States

Commissioner Objects to Ferc Approval of Freeport LNG Expansion

The US Federal Energy Regulatory Commission (Ferc) may have authorised the construction of Train 4 at the Freeport LNG terminal in Texas in a May 16 decision, but one commissioner has vigorously dissented from that approval.

Train 4 matches the three trains already under construction at the 20.4mn mt/yr Freeport LNG terminal: 5.1mn mt/yr (the equivalent of 740mn ft3/day) of liquefaction capacity. Train 1 is expected to begin commercial production in 3Q 2019, with the next two trains expected to enter service by the middle of 2020.

About 13.5mn mt/yr of liquefaction capacity has been contracted under 20-year tolling agreements with a variety of off-take customers, while 0.5mn mt/yr has been contracted under a three-year sales and purchase agreement with trader Trafigura.

The Train 4 approval is the fourth authorisation for new LNG export capacity issued by Ferc this year, following the April approvals of the Driftwood and Port Arthur projects in Louisiana and Texas, respectively, and the February approval of Venture Global’s Calcasieu Pass project in Louisiana.

“I’m proud of the efforts by the commission and its staff to process today’s and our previous LNG orders,” Ferc chair Neil Chatterjee said. “Exporting LNG from the US can help increase the availability of inexpensive, clean-burning fuel to our global allies who are looking for an efficient, affordable and environmentally friendly source of generation.”

Ferc commissioner Richard Glick, however, vigorously dissented from the decision to approve Train 4, saying it represented an abrogation of the commission’s responsibility to consider the climate change consequences of building and operating a natural gas liquefaction facility.

Approval, he said, violates both the Natural Gas Act (NGA) and the National Environmental Policy Act (NEPA), neither of which allow Ferc to “assume away” the climate change implications of allowing LNG export terminals to be built and operated.

Under the NGA, the commission is obligated to examine a proposed facility’s impact on the environment and public safety, including its impact on climate change, Glick said, while under NEPA, it must consider the harm caused by a project’s greenhouse gas emissions. However, the commission insists that it can’t assess climate change impacts because it lacks generally accepted criteria for assessing those impacts.

“Notwithstanding this alleged inability to assess significance of that environmental impact, the commission concludes that the project will not significantly impact the quality of the human environment,” Glick writes in his dissent.That is the equivalent of concluding that an action known to be dangerous is actually safe because we don’t consider exactly how dangerous it is.”