Projected emissions from Freeport LNG Development LP’s proposed liquefied natural gas (LNG) import terminal and natural gas pipeline “will be in conformity” with the emissions output that Texas has budgeted for the Houston/Galveston area for 2007, when the facilities are expected to start up, FERC said in a draft determination Tuesday.

“We believe that project emissions are within the corresponding [Texas State Implementation Plan] emissions budgets established for Houston/Galveston for 2007,” FERC staff concluded in a draft general conformity determination, adding that Freeport LNG was negotiating with Texas to further mitigate or offset the project’s emissions.

The Federal Energy Regulatory Commission was required to review the anticipated emissions output of the Freeport LNG terminal because the facility will be sited in Brazoria County, TX, a county included in the Houston/Galveston area, which has been designated a “severe nonattainment area” with respect to the one-hour National Ambient Air Quality Standard for ozone. Specifically, it called for agency staff to look at nitrogen oxides (NOx) and volatile organic compounds (VOCs), which are ozone precursors.

FERC calculated total emissions from the project (both direct and indirect) for each year between 2004 and 2010, identifying the years when NOx and VOC output would be the heaviest. It said maximum project NOx emissions of 313.36 tons per year were expected to occur in 2001, while maximum project VOC emissions of 27.91 tons per year were anticipated in 2005.

The levels exceeded the project threshold for NOx and VOC emissions in the Houston/Galveston area (25 tons per year for each), but they still conformed with the state’s total emissions budget for the region in those years.

Texas must now determine whether the “total of direct and indirect emissions from the [project], or portion thereof, would result in a level of emissions that, together with all other emissions in the Houston/Galveston area nonattainment area, would not exceed the SIP emissions budgets.” In short, the state must decide whether emissions from the proposed LNG facilities would tip the scale for the allotted emissions limit in Houston/Galveston, placing it out of compliance with clean air rules.

Commission staff called on the Texas Commission on Environmental Quality to review the agency’s draft determination, and submit a “formal determination and confirmation” that emissions from the LNG project can be accommodated within the state’s SIP plan for the Houston/Galveston region. A favorable state ruling “will serve as a basis for making a final general conformity determination for the project,” staff said.

The general conformity review is required under the federal clean air law, and prohibits the federal government from supporting, licensing or permitting any activities that do not conform to a state clear air implementation plan.

The $400 million LNG project is expected to have a revaporization and sendout capacity of up to 1.5 Bcf/d. Plans call for the construction of two LNG storage tanks, each with the capacity to hold 3.5 Bcf/d of gas, and nearly 10 miles of 36-inch diameter pipeline extending from the import terminal to a proposed meter station at the Stratton Ridge storage hub.

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