US Court Remands FERC LNG Project OKs

A federal appeals court on Tuesday remanded, but did not vacate, the US Federal Energy Regulatory Commission (FERC) authorization for two South Texas LNG projects. The authorizations were remanded back to the commission for further consideration. The next regulatory steps could go a long way in defining the Biden administration's attitude toward US LNG amid mixed messaging so far (LNGI May28'21). The Ruling In its ruling, a panel of the US Circuit Court of Appeals for the DC Circuit ruled that FERC violated the National Environmental Policy Act (NEPA) with "deficient" environmental analyses. FERC must now further analyze how the Texas LNG and the Rio Grande LNG projects and their related pipelines will impact climate change and low-income and minority communities in Cameron County, Texas, which includes the Port of Brownsville where the terminals would be located. It’s estimated the county is 89% Hispanic/Latino and 30% of its residents live below the poverty line. Both sides reacted positively to the ruling. A Texas LNG spokesman said it highlighted the need for environmental justice, while Rio Grande developer NextDecade noted that the ruling had affirmed the validity of the FERC authorization. “We look forward to the FERC’s response to the court’s requests,” said NextDecade Chairman and CEO Matt Schatzman. Going Forward While it is true that the court said it is “reasonably likely” that on remand FERC can address the two identified deficiencies “while reaching the same result,” this is not the Trump-era commission that approved the projects. In fact, the current FERC chairman, Richard Glick, had dissented on those approvals for inadequately addressing NEPA concerns and he will soon have backup from a Democratic majority on the commission. "This decision clearly demonstrates that the commission has the authority and obligation to meaningfully analyze and consider the impacts from (greenhouse gas) emissions and impacts to environmental justice communities," Glick said (LNGI Oct.27'20). ClearView Energy said there is little reason to suspect that project authorizations are in danger at this point, especially as NextDecade has plans to capture and store carbon produced by its operations (LNGI Apr.19'21). However, this process will certainly raise the environmental bar for future infrastructure projects that come before the commission. Tom Haywood, Houston