Gas projects reveal FERC’s environmental justice conundrum

By Miranda Willson | 08/03/2021 06:17 AM EST

Port Isabel, Texas, pictured here, is close to two planned liquefied natural gas export terminals. Environmental justice advocates say the Texas LNG and Rio Grande LNG projects, approved by the Federal Energy Regulatory Commission in 2019, illustrate how the commission could improve its environmental justice review processes. Rob Tilley/DanitaDelimont.com "Danita Delimont Photography"/Newscom

Correction appended.

Two liquefied natural gas terminals under development at the tip of Texas’ Gulf Coast could either lift low-income residents out of poverty or destroy local fishing and tourism economies, depending on whom you ask.

The disparate views on the planned LNG projects — Rio Grande LNG from Houston-based NextDecade and the independently owned Texas LNG — underscore a tension for the Federal Energy Regulatory Commission and Chair Richard Glick’s recent pivot to address environmental justice: How should FERC determine whether the costs of a proposed project outweigh its benefits? Under what circumstances should projects in disadvantaged communities be approved or denied? And will FERC’s decisions survive legal scrutiny?

FERC greenlighted the two LNG projects, which are slated to be built in the majority Latino region of Cameron County, Texas, in the fall of 2019. At the time, then-Chair Neil Chatterjee, a Republican, touted the projects as a win for the climate and U.S. foreign policy.

“The Commission has now completed its work on applications for 11 LNG export projects in the past nine months, helping the United States expand the availability of natural gas for our global allies who need access to an efficient, affordable and environmentally friendly fuel for power generation,” he said in a statement at the time.

To some legal experts and environmental activists, however, FERC’s analysis of the potential health and economic impacts of the projects on nearby communities was a textbook example of the agency’s inadequate consideration of environmental justice issues. Currently, the agency considers environmental justice within broader environmental impact statements, but there have been complaints that those analyses are insufficient and don’t fully assess impacts to low-income areas and communities of color.

Glick, a Democrat who became chairman in January, vowed to make environmental justice a greater priority for the commission throughout its decisionmaking processes. At the same time, industry has questioned whether the agency has the legal authority to do so.

The developers of Texas LNG and Rio Grande LNG each estimates that the terminals could bring thousands of new jobs to the region. Many elected officials — from Sen. John Cornyn (R-Texas) to the Cameron County Commissioners Court — have also touted the projects’ economic benefits, including the tax revenue they could bring in.

“Texas LNG is committed to operating in an environmentally responsible manner, providing hundreds of millions of dollars in economic benefits and thousands of direct and indirect jobs to the Rio Grande Valley,” the company said in a statement.

The facility will also be powered by “electric drives” rather than gas turbines to lower its carbon emissions, Texas LNG added. Rio Grande LNG, meanwhile, is incorporating carbon capture and storage into its design to cut “permitted emissions” at its facility by over 90% (Energywire, March 19). Developer NextDecade did not respond to requests for comment.

But local officials in a handful of small, coastal cities located closest to the terminal sites have opposed the projects every step of the way and continue to question whether residents in their communities will benefit from them.

In Port Isabel, for example, a tourism-dependent town of 6,200 people located 2½ miles from the Texas LNG project site, 27% of residents live below the poverty line, and some are worried about how the two projects could affect their livelihood, said Jared Hockema, the town’s city manager.

Access to the nearby Brownsville ship channel is critical for Port Isabel’s commercial fishermen and shrimpers as well as fishing instructors who appeal to visiting tourists, according to Hockema and other residents of Cameron County. But the projected increase in tanker traffic through a nearby ship channel to transport the LNG could disrupt fishing activities and pose an eyesore for tourists, Hockema said.

“There are really serious environmental issues, really serious public safety issues and a really pressing issue of environmental justice,” said Hockema, who sees the projects as an “existential threat” to Port Isabel.

Community groups opposing the projects also say the commission’s analysis of how the terminals could increase pollution didn’t account for potential health disparities in the nearby predominantly Latino communities. On average, Latinos face higher rates of obesity than white Americans, according to the Department of Health and Human Services, and are less likely to have health insurance.

Still, the majority of FERC commissioners determined in 2019 that the Rio Grande LNG and Texas LNG projects would each have “minor” socioeconomic impacts to the area. And local supporters of the projects maintain that the terminals will bring good-paying jobs that are desperately needed given that more than 30% of Cameron County residents live below the poverty line.

“Though the projects have not yet moved forward, we are watching anxiously and working with workforce partners to ensure that there is sufficient skilled labor to fill the needs of the industry,” Trey Mendez (D), mayor of Brownsville, which is the county seat, said in a statement.

Next steps

 

Richard Glick is the Democratic chair of the Federal Energy Regulatory Commission.
Richard Glick is the Democratic chair of the Federal Energy Regulatory Commission. | Francis Chung/E&E News

In 2019, Glick voted as a FERC commissioner not to issue permits to both the Texas LNG and Rio Grande LNG terminals. In his dissent in the Texas LNG case, he argued that the commission disregarded the “incremental impact” of the projects’ pollution on “economically disadvantaged communities.” Around the same time, FERC had also approved a third LNG project in Cameron County, which has since been canceled by the developer.

Since becoming chairman this year, Glick has repeatedly said the commission should be more careful to ensure FERC decisions don’t impose additional burdens on marginalized communities.

At a hearing last week of the House Energy and Commerce Committee, Glick described his thinking on the issue back to 2017, when he first became a FERC commissioner. “I realized that in our particular process of how we consider environmental justice impacts for proposed natural gas pipelines and LNG facilities, we really don’t have a thorough process,” Glick said.

In June, FERC officially established its Office of Public Participation, a new division at the agency that some observers say is a key step toward ensuring all perspectives are heard when the commission reviews potential energy projects. Earlier this year, FERC also hired its first senior counsel for environmental justice and equity, who is working to identify ways for the commission to “build out a culture and program that integrates environmental justice and equity considerations” into its decisions, the agency said in a statement.

“We’re going to reach out through our Office of Public Participation to these communities but also make sure that in our decisionmaking processes, we take these concerns into account upfront,” Glick said during the hearing.

Montina Cole, a former senior attorney at the Natural Resources Defense Council who is now senior counsel for environmental justice and equity at FERC, is “putting together a team” to ensure that the commission addresses environmental justice issues before making a final decision on a project.

Still, environmental justice advocates say it’s not yet clear how FERC will change its decisionmaking. The Cameron County projects also exemplify how much the details of those justice analyses can shape FERC’s decisions, said Jennifer Richards, a staff attorney at Texas RioGrande Legal Aid, who is representing community members in Cameron County in litigation against FERC.

For example, when FERC conducted an environmental justice analysis in its environmental impact statements for the Rio Grande LNG and Texas LNG projects, the agency declined to compare the demographics of the census blocks nearest to the terminal sites with those of a broad comparison group representing the general population, Richards said. Instead, the commission compared the demographics of the census blocks with those of Cameron County as a whole, which has a similar racial and socioeconomic makeup as that of Port Isabel, Laguna Heights and other census blocks nearest to the terminals.

FERC therefore concluded that the projects would not disproportionately impact environmental justice communities, according to the commission’s environmental reviews for each project. That logic was questioned by a judge in March during oral arguments for an ongoing lawsuit against FERC’s approval of the projects (Energywire, March 24).

“It’s essentially saying that because all of the people being impacted are environmental justice communities, there can be no environmental issues,” Richards said. “In the future, I think what FERC will need to do is come up with a mechanism that allows them to engage in a comparative analysis, and there’s a significant amount of guidance out there on how to do this, including from the EPA.”

In an ongoing FERC proceeding regarding how the commission approves natural gas pipelines, some have also called for a more comprehensive review of pollution impacts in FERC’s environmental justice analyses, another issue of relevance to the Cameron County projects. In approving both projects, FERC concluded that criteria air pollutants, such as nitrogen dioxide and ozone, from the projects would not exceed levels set by EPA’s National Ambient Air Quality Standards (NAAQS).

But most criteria pollutants regulated under the standards “have acknowledged health impacts even when found in levels below the legally permissible limits,” staff at the Institute for Policy Integrity at New York University School of Law wrote in comments to FERC. That’s particularly relevant for environmental justice communities that might be more likely to have respiratory issues and other health problems, according to their comments.

“Ignoring the health effects of a project that does not cause the NAAQS to be violated is disproportionately problematic for minority and other sensitive communities that are more likely to be harmed by exposure at lower levels,” the Institute for Policy Integrity wrote in May. “By failing to consider impacts of pollutant exposure below the NAAQS, FERC will underestimate the harms a project poses to already sensitive environmental justice communities.”

An additional step the commission could take is to adopt a more transparent process for determining whether a project is in the public interest, said Jennifer Danis, a senior fellow at the Sabin Center for Climate Change Law at Columbia University.

That sort of process could include accounting for whether jobs resulting from a project would be local, Danis said.

Of the 5,000 temporary construction jobs and 200 to 250 permanent jobs expected to be created by the Rio Grande LNG project, NextDecade has committed to reserving 35% to residents in Cameron County, according to the community group Save RGV From LNG, which opposes the LNG projects. NextDecade did not respond to a question about its latest commitment to local hiring, while Texas LNG said in an email that its project would bring “thousands of direct and indirect jobs to the Rio Grande Valley.”

“Too often, for the benefits of the project, the commission historically has not asked, ‘To whom?’” Danis said. “When the commission is doing a public interest analysis, the commission has to look more deeply into how to weigh the impacts of the project versus the benefits.”

 

CCS, jobs and legal concerns

While some legal analysts say that it’s admirable for FERC to try to better account for demographic factors in its decisionmaking processes, it could be difficult to do in practice.

Industry groups have also argued that the commission lacks the authority under the Natural Gas Act to reject projects on environmental justice grounds.

“[Adoption] of such a policy could function to impair needed natural gas pipeline development, depriving communities of the very real benefits of jobs, economic growth and energy security that investment in interstate gas pipelines generate,” the American Petroleum Institute wrote in comments submitted to FERC in May.

Oftentimes, political leaders might determine that a project could be beneficial while local residents oppose it, said Stephen Humes, a partner at the New York-based law firm Holland & Knight who has represented energy companies before FERC.

That makes it “tricky” for a permitting agency like FERC to assess whether a project is in the public interest, Humes said.

“You tend to see a split between political leadership wanting the tax base, wanting the investment in their community, and then certain groups not part of the government maybe saying they don’t want it,” Humes said.

In the case of the Cameron County LNG projects, some local economic development groups are joining the Brownsville mayor in looking forward to seeing the projects advance. Sergio Contreras, president and CEO of the Rio Grande Valley Partnership, an economic and community development nonprofit, said the terminals would bring a wide variety of good-paying jobs, boost existing businesses such as restaurants, and have little to no adverse effects on the tourism economy.

Unemployment in the Brownsville metro area as of June was 9.6%, compared with 6.5% statewide. New jobs could help combat the region’s unemployment and high poverty rates, Contreras said.

“What I’ve seen on my side is continued interest in the tourism we have in our region, primarily because the landscape is still there,” Contreras said. “The investment will be in targeted areas, and I do know the companies go through strenuous environmental [reviews].”

Even so, community opposition to the project has at times gotten the attention of local elected officials. In May, for example, the Cameron County Commissioners Court voted to table a resolution that would have expressed support for NextDecade’s carbon capture and storage plans at the Rio Grande LNG terminal.

“A lot of community members showed up; they made public comments and spoke out against a resolution supporting Rio Grande’s carbon capture,” said Rebekah Hinojosa, an organizer with the Sierra Club. “Because of that community pressure, the county has tabled that resolution until there’s more information from the company.”

Disagreements within a community about the benefits and drawbacks of proposed projects are common, said Danis of the Sabin Center. That’s why federal agencies should ensure that communities have accurate and detailed information on the range of impacts, Danis added.

“It’s wrong-minded to assume there’s a singular community perspective,” she said.

For their part, environmental justice activists from the Rio Grande Valley to the mid-Atlantic are hopeful to see what comes out of FERC’s environmental justice position and Office of Public Participation, even as they hope for additional concrete reforms, said Mary Finley-Brook, an associate professor of geography and environmental studies at the University of Richmond.

“I think the problem will be actually seeing any changes and making sure [the new position] doesn’t become another level of bureaucracy where it becomes almost a distraction,” Finley-Brook said.

Correction: An earlier version of this story incorrectly stated that Brownsville Mayor Trey Mendez supports the Rio Grande LNG and Texas LNG projects. This story has been updated with a statement from Mendez.