In what FERC labeled a “breakthrough” on LNG export project reviews, a majority of the Commission approved the Calcasieu Pass LNG project and related TransCameron Pipeline after the February 21 open meeting concluded.
Commissioner Cheryl LaFleur concurred with the decision after an analysis of the greenhouse gas (GHG) emissions associated with the Venture Global facilities. As she has in natural gas pipeline project reviews, LaFleur conducted her own analysis of the emission impacts and found them consistent with the public interest, putting her in the majority with Chairman Neil Chatterjee and Commissioner Bernard McNamee.
Commissioner Richard Glick dissented from the order (CP15-550, CP15-551), insisting that by ignoring the emission consequences of the facilities, the majority is assuming that climate change plays no meaningful role in FERC’s public interest determination, counter to its obligations under the Natural Gas Act and National Environmental Policy Act.
LaFleur expressed her displeasure with the lack of a full assessment of the GHG emissions associated with the LNG and pipeline project and other projects as part of the Commission’s environmental review of facilities. “I will continue to consider and evaluate these issues as they arise in individual proceedings,” LaFleur said in her concurring statement.
The consideration of the project in Cameron Parish, Louisiana, had been hung up based on a lack of agreement among the four commissioners on assessing the GHG emissions of the project. Leaders in Washington praised the Commission for reaching a resolution in the case, with Department of Energy Deputy Secretary Dan Brouillette and Sen. Bill Cassidy (R-La.) tweeting late on February 21 that breaking the impasse is great news for the energy sector.
Project owner Venture Global LNG expects to reach a final investment decision on the Calcasieu Pass project in 2019, and it recently sent a letter to FERC when a final order was delayed from the planned schedule, which called for an order by January 22. Delays beyond that date “could undermine the market’s confidence in the Commission process,” the company said in the January 15 letter.
The project was on the agenda for the December FERC meeting but was struck after it was clear there was no agreement on consideration of the issues. Venture Global’s letter and industry comments after that raised concerns about a 2-2 split among the four commissioners on LNG project reviews.
LaFleur noted that she has been “troubled by the narrative that a partisan divide at FERC would prevent action on LNG exports. Indeed, I note that existing LNG export facilities were approved by a bipartisan FERC in the Obama administration.”
The Calcasieu Pass consideration properly discloses the direct GHG emissions from the project and puts them in the context of national GHG emissions, she said.
“Today’s order demonstrates that FERC can act when commissioners are engaged and willing to compromise. I remain committed to moving our work forward, but will continue to consider each project on the merits,” LaFleur said on Twitter after the order was issued late on February 21. She noted that she indicated at the December meeting that she believed there was a path forward on the project’s review, and “I particularly want to thank Commissioner McNamee for working with me to find that path.”
Chatterjee opened the February 21 meeting stressing the importance of LNG project reviews and steps the Commission has taken in making that a priority. He expressed confidence that there will be progress on pending project reviews, without naming specific cases, and said “stay tuned,” when asked for specifics about whether an agreement had been reached on the Calcasieu Pass project.
“I am extremely pleased that we are issuing the certificate order” for the LNG export terminal and pipeline that will enable the export of 12 million metric tons of LNG per year, Chatterjee said in a statement. “But even more so, I really appreciate the efforts of my colleagues to work together to come to an agreement on this facility. This is significant, as I anticipate we’ll be able to use the framework developed in this order to evaluate the other LNG certificates that the Commission is considering,” he said.
McNamee issued a separate statement on the order, praising Chatterjee for his leadership and the hard work of FERC staff to show that FERC can approve infrastructure projects in accordance with the law and in an environmentally responsible manner. “I think it is important to recognize that the Commission seriously considered—and took a hard look at—all of the potential environmental impacts from the project, including climate change. Disagreeing about how to consider those potential impacts does not mean that we ignored them or failed to give them thoughtful consideration,” McNamee said.
That is counter to the view of Glick, who wrote in his dissenting statement that by refusing to assess the significance of the project’s GHG emissions, “today’s order effectively writes climate change out of the public interest determination entirely.”
The Environmental Impact Statement for the facilities concludes that the project will emit nearly 4 million metric tons of GHGs annually. “Although that quantification of the project’s GHG emissions is a necessary step towards meeting the Commission’s NEPA obligations, counting the volume of emissions is insufficient,” Glick said, expressing a preference for using existing analyses to take the “hard look” at environmental impacts required by NEPA.
The LNG sector welcomed the development, with the Center for LNG and LNG Allies praising FERC for reaching an agreement in the order. LNG Allies President and CEO Fred Hutchison noted that the group has had ongoing discussions with Republican and Democrat commissioners for several months about working together to find a bipartisan approach on FERC’s review of LNG facilities that has been a staple at the agency for more than 10 years.
The Calcasieu Pass order represents the first FERC approval of an LNG export project in more than two years, with several orders on GHG emission considerations during that period, Hutchison said. “We’re very encouraged by today’s announcement and look forward to further, timely LNG project approvals throughout 2019,” he said.
By Tom Tiernan TTiernan@fosterreport.com