FERC Reaches “Compromise” and Approves New LNG Export Terminal

Calcasieu Pass LNG export terminal

For the first time in two years, the Federal Energy Regulatory Commission late last week approved a Liquefied Natural Gas (LNG) export project — the Calcasieu Pass in Cameron Parish, Louisiana — after the Commission’s two Republican commissioners and one of the two Democratic commissioners agreed to use a new approach for consideration of direct greenhouse gas (GHG) emissions from LNG facilities.  The compromise approach apparently is that the facility must disclose its annual GHG emissions and compare them the overall annual emissions in the U.S. in order to gain approval.  The Natural Resources Defense Council criticized this approach, calling it a “check the box” exercise instead of giving GHG emissions the “hard look” needed.  

The Democratic Commissioner who voted with the Republicans stated afterward in a tweet “The GHG emissions from liquefaction are substantial. Today’s order rightly discloses the direct GHG emissions from Calcasieu Pass and puts them in the context of National GHG emissions.”  The Commission has been deadlocked over this issue but the compromise provides a precedent that could be used to approve other LNG projects that are currently pending.  Many of these projects are based along the Gulf of Mexico coastline, in places that are vulnerable to storms and still have not recovered from recent extreme events, like Port Arthur, Texas where the entire town was submerged by Hurricane Harvey.  There are a dozen other similar projects awaiting approval by FERC — companies are racing to build LNG  terminals to feed the growing market for natural gas in Asian countries that are seeking a to shift away from coal.  

Why This Matters:  Natural gas is complicated.  On the positive side, burning natural gas rather than coal in Asia is a good thing.  On the other hand, here at home, there are uncontrolled methane seeps during the drilling and extraction process, and then there are the massive but seemingly insignificant (according to FERC) CO2 emissions from the transportation and production of LNG.  We have concerns about the fact that gas from fracking may be drying up just as these new LNG terminals come on line in the Gulf of Mexico.  Plus, many of these terminals are in vulnerable coastal areas, and the risks due to storms are not mentioned in FERC’s order and seem not to have been considered at all.  On the whole, this seems like an ill-considered decision and worse yet, there are likely to be more like it coming down from FERC soon.

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