A petition filed on July 19 by Sierra Club and Healthy Gulf seeks review of a “dredge and fill” permit granted by the U.S. Army Corps of Engineers to Driftwood LNG – a liquefied natural gas (LNG) export terminal under construction near Lake Charles. The permit was issued under the Clean Water Act in March 2019 – the same year the project received FERC approval – and will allow construction crews to “clear, grade, excavate and place fill material” on site to build the plant, which is being built on a 1,000-acre site on the west bank of the Calcasieu River, south of Lake Charles.[1] The petition was filed – and the suit will proceed – in the United States Court of Appeals for the Fifth Circuit, which has jurisdiction over such matters pursuant to The Natural Gas Act (15 U.S.C. § 717r(d)(1)).[2]
The filing does not outline which portions of the permit are challenged, but a joint statement from the two groups alleges that the permit “falls short of legal requirements to avoid and compensate for impacts to wetlands.” In addition to wetlands impacts, the groups allege that the LNG terminal and an associated pipeline would have a “staggering” impact on the climate in the form of greenhouse gas emissions. On the other hand, in a letter to FERC urging support for the LNG project, Congressman Clay Higgins (R-LA) referenced a multi-agency “vigorous regulatory review” conducted relative to the project, the forecasted 27.6 million tonnes/year of LNG that would be available for export, and the creation of 7,000 jobs.
On July 22, environmental groups petitioned FERC to reverse its previous decisions disclaiming jurisdiction over certain inland LNG facilities. Under Section 3 of the Natural Gas Act (NGA), FERC is responsible for authorizing the siting and construction of onshore and near-shore LNG import or export facilities.[3] However, in these previous decisions,[4] FERC concluded that LNG facilities were not subject to its jurisdiction unless: (1) the facility was connected to a pipeline (qualifying as an “LNG terminal”), or (2) the facility was located where ocean-going ships directly load LNG for export (qualifying as an “LNG export facility”). Examples of LNG facilities not subject to FERC’s oversight as a result of these decisions include those receiving imported LNG and shipping it out for use as vehicle fuel, those producing compressed natural gas for export, and those producing LNG that a third party exported, among others.[5]
In support of the petition, the coalition of environmental groups – led by Suwannee Riverkeeper for WWALS Watershed Coalition, Inc. – argues that FERC frustrated legislative intent under the NGA, misread and conflated the Act’s “LNG Terminals” provision with its “transportation facilities” provision, and incorrectly substituted its policy judgment for that of Congress, among other assertions.
Pursuant to FERC’s Notice of Petition for Rulemaking, any person who wishes to submit comments on this Petition must do so by September 20, 2022.
[1]https://www.theadvocate.com/acadiana/news/business/article_58ce76ce-0937-11ed-9c62-7ba153e78f60.html.
[2]Jurisdiction is established by The Natural Gas Act, specifically 15 U.S.C. § 717r(d)(1) (“Rehearing and review”):
The United States Court of Appeals for the circuit in which a facility subject to section 717b of this title or section 717f of this title is proposed to be constructed, expanded, or operated shall have original and exclusive jurisdiction over any civil action for the review of an order or action of a Federal agency (other than the Commission) or State administrative agency acting pursuant to Federal law to issue, condition, or deny any permit, license, concurrence, or approval (hereinafter collectively referred to as “permit”) required under Federal law, other than the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.).
[3] 15 U.S.C. § 717b(a), (e).
[4] Shell U.S. Gas & Power, LLC (“Shell”), 148 FERC ¶ 61,163 (Sept. 4, 2014), Docket No. RP14-52-000,
Emera CNG, LLC (“Emera”), 148 FERC ¶ 61,219 (Sept. 19, 2014), Docket No. CP14-114-000,
Pivotal LNG, Inc. (“Pivotal” or “Pivotal II”), 151 FERC ¶ 61,006 (Apr. 2, 2015), Docket No. RP15-259-000.
[5]https://www.law360.com/real-estate-authority/articles/1514750/enviros-press-ferc-to-regulate-inland-lng-facilities.
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