By - Jim Vess

FERC approves three Texas LNG facilities despite climate and excess capacity concerns

Energize Weekly, December 4, 2019

The Federal Energy Regulatory Commission (FERC) approved three new liquefied natural gas (LNG) terminals in Texas at its November meeting over the objections of one commissioner, who said the decisions failed to take into account their impact on climate.

The commission also rejected arguments from environmental groups that the approvals would create excess export terminal capacity in the U.S.

The three facilities, all along the Brownsville Ship Channel in Cameron County, Texas, were approved on a 2-1 vote with Republican-appointed commissioners Neil Chatterjee and Bernard McNamee supporting the terminals and Richard Glick, a Democrat, opposing them.

Texas LNG will have 4 million metric tons (MMT) of export capacity and is slated to be in service in five years. The Rio Grande LNG will have 27 MMT of capacity “made available for service” within seven years.

The Annova LNG Common Infrastructure terminal will have an optimal capacity of 6.95 MMT and a four-year construction schedule. All three facilities made their initials applications to the FERC in 2016.

The question of climate impacts from fugitive emissions from the facilities was examined in the evaluations of the plants, but the commission concluded they were marginal.

In the case of the Annova terminal, for example, the calculation was that the potential increase in carbon dioxide emissions based on 2017 levels was .0064 percent of the national level.

“Currently there are no national targets to use as benchmarks for comparison, and, similarly, Texas does not have GHG [Green House Gas] targets or benchmarks,” the commission said in its order approving the plant.

Nevertheless, Glick took issue with the analysis and said in his dissenting opinion that the order violated the Natural Gas Act (NGA) and the National Environmental Policy Act (NEPA).

“The Commission once again refuses to consider the consequences its actions have for climate change,” Glick said. “Although neither the NGA nor NEPA permit the Commission to assume away the impact that constructing and operating this liquefied natural gas facility will have on climate change, that is precisely what the Commission is doing here. “ 

The Sierra Club and Friends of the Wildlife Corridor had questioned whether all three facilities were needed.

In their protest of the Annova terminal, they argued the project was “contrary to the public interest” because Annova has not provided contracts or other evidence of foreign demand or market support for its project.

The commission rejected the Sierra Club argument saying that the U.S. Department of Energy (DOE) had already issued an export license to the facility indicating that there was a market need for the LNG.

“The question whether there is a market need for the liquefaction services to be provided cannot be divorced from the question whether there is market need for the commodity to be produced by those services,” the commission order said. “DOE, which has sole jurisdiction over commodity exports, has already answered that question.”

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