Greens lose another export project challenge

By Robin Bravender | 07/15/2016 01:25 PM EDT

A federal appeals court today rejected environmentalists’ challenges to a project that would export liquefied natural gas from a Chesapeake Bay facility.

A federal appeals court today rejected environmentalists’ challenges to a project that would export liquefied natural gas from a Chesapeake Bay facility.

The U.S. Court of Appeals for the District of Columbia Circuit’s opinion today marks the latest legal blow to green groups after the same court last month dismissed two separate attacks on liquefied natural gas export projects.

Today’s opinion denied environmentalists’ claims that government regulators had improperly approved Dominion Resources Inc.’s plans to convert its $3.8 billion Cove Point LNG import terminal in Maryland into an export facility.


Citing a recent opinion in a case over a terminal in Freeport, Texas, the court said that the Federal Energy Regulatory Commission was not required under the National Environmental Policy Act "to consider indirect effects of increased natural gas exports through the Cove Point facility, including climate impacts."

The opinion in the case, EarthReports Inc. v. FERC, was written by Judge Judith Rogers, a Democratic appointee. She was joined by two Republican-appointed colleagues, Judges Thomas Griffith and Brett Kavanaugh.

Environmental groups the Chesapeake Climate Action Network, Patuxent Riverkeeper and the Sierra Club — represented in court by Earthjustice — contended that FERC had failed to properly consider the impacts on air, water and climate change that the project would trigger by expanding hydraulic fracturing in the region.

This case is one of several launched by environmentalists hoping to limit the environmental impacts of expanded gas export infrastructure. In the Freeport case and another lawsuit challenging a facility in Louisiana, the D.C. Circuit issued opinions last month asserting that the Energy Department is the correct target of the environmental groups’ complaints about increased exports, not FERC, which approved the expansions of gas terminals (Greenwire, June 28).

FERC argued to the court that it isn’t the only agency responsible for assessing the environmental impacts of the project under the National Environmental Policy Act and that the Energy Department and other agencies conducted broad studies looking at the possible impacts (E&ENews PM, April 19).

Environmentalists’ remaining challenges in this case — surrounding FERC’s analysis of the impacts of ballast water on water quality, maritime traffic on the North Atlantic right whale and the Cove Point facility’s operations on public safety — "fail to show that the Commission did not adequately address these concerns," the court said today.

In a separate challenge, BP Energy Co. had also sued FERC over its approval of the Cove Point project. The subsidiary of BP PLC argued that FERC failed to analyze whether the company had been discriminated against when Dominion offered its competitor — but not BP — a favorable early contract termination.

The D.C. Circuit today remanded that case to FERC for further explanation of why the agreement between Dominion and Statoil "was not unduly discriminatory."

Click here to read the opinion.