FERC Says Yes to the LNG Terminal

The Department of Energy may not be ready to say yes to more liquified natural gas export projects, but the Federal Energy Regulatory Commission is. In a meeting on Thursday, FERC approved plans for a massive LNG terminal project in Louisiana by a 2-1 vote, with Allison Clements, an outgoing Democratic commissioner, as the lone dissenter.

The Calcasieu Pass 2, or CP2, project would install some 20 million metric tons of export capacity in a hurricane-battered coastal Louisiana community near the Texas border. You may have heard of it if you followed the drama in January around the Biden administration’s decision to pause approving new LNG export terminals, which will allow the DOE to reexamine how it assesses whether new energy projects are in the “public interest.” Republicans haven't stopped talking about it since, arguing that the pause chokes off a major American export and that it both was tantamount to a fossil fuel ban and that it undermined the administration's climate goals. Democrats — especially those running for reelection in swing states — have been lukewarm.

CP2 has enjoyed bipartisan political support within Louisiana but became a target for national and local environmental groups who want the Biden administration to do more to prevent the development of new fossil fuel resources. These groups argued that CP2 would both “lock in” substantial greenhouse gas emissions from the extraction and transport of natural gas (one former Environmental Protection Agency official called it a “carbon mega bomb”) and have deleterious environmental effects on an area that’s already heavily industrialized.

“Venture Global is a bad actor in the energy space and FERC is enabling them to start another disastrous project that puts polluters over people,” the Sierra Club’s Cathy Collentine said in a statement. “CP2 is an environmental justice, climate, and economic disaster waiting to happen, and with this decision, FERC has ignored the harm that will be caused by CP2 — and gas exports more broadly — and sided with the greedy fossil fuel industry.”

FERC evaluated CP2’s environmental impacts last year and concluded that they would be “less than significant,” but that the “visual resources” of the area would see “significant adverse effect” — in other words, it would be an ugly and permanent addition to the landscape.

But final approval has been delayed for months, much to the annoyance of the industry. FERC released its final environmental impact statement in July of last year, making the wait for approval one of “the longest to sit before the commission,” according to Bloomberg. The climate effect of LNG exports is a matter of some debate, with some researchers arguing that if LNG is replacing fuels with higher associated emissions, it can lead to lower overall global emissions over time.

LNG projects exist in a kind of regulatory Venn diagram. While FERC has jurisdiction over natural gas pipelines, natural gas exports to countries that don’t have free trade agreements with the U.S. — which make up the bulk of the natural gas market — requires DOE approval, and that’s still in limbo. “No major LNG terminal has ever reached a final investment decision or started construction without this critical export authorization,” the Sierra Club noted in its statement.