The U.S. Department of Energy (DOE) has affirmed its approval of non-free trade (FTA) agreement liquefied natural gas exports by Cameron LNG LLC from its terminal in Louisiana over the objections of the Sierra Club.
Sierra Club sought rehearing/denial of the approval, arguing that DOE failed to comply with the National Environmental Policy Act (NEPA). It argued that DOE adopted an environmental impact statement from the FERC that did not take a "hard look" at indirect and cumulative impacts of LNG exports (see Daily GPI, July 23, 2014; July 22, 2014). At the heart of the Sierra Club argument was its assertion that consequences of gas production potentially induced by exports should have been considered.
"The department does not dispute the economic logic that authorizing exports of natural gas to non-FTA countries could, all else equal, exert upward pressure on domestic natural gas prices as foreign purchasers compete with domestic purchasers," DOE said [11-162-LNG]. "Nor does the department dispute that higher natural gas prices could lead to increased natural gas production at the national level...
"...[W]e reject the conclusion that the environmental impacts of such marginal production are 'reasonably foreseeable' within the meaning of the CEQ's [Council on Environmental Quality] regulations and the applicable case law. To the contrary, it would be impossible to identify with any confidence the marginal production at the wellhead or local level that would be induced by Cameron LNG's exports over the period of its non-FTA authorization. Natural gas will be produced in substantial quantities across the United States regardless of how the department rules on Cameron LNG's application."
Earlier this month, Sempra Energy submitted to the Federal Energy Regulatory Commission its own environmental assessment for a planned expansion of its Cameron LNG terminal, which is under construction (see Daily GPI, Sept. 8).