Environmentalists trying to torpedo planned exports of natural gas have shifted their sights from the Federal Energy Regulatory Commission to the Department of Energy.
After challenging FERC's approval of export terminals in Texas and Louisiana, the Sierra Club was told by a federal appeals court yesterday the group had targeted the wrong agency (Greenwire, June 28).
The U.S. Court of Appeals for the District of Columbia Circuit said DOE was the Sierra Club's proper foe. While FERC spearheads environmental reviews of export terminals for liquefied natural gas, DOE determines whether exports are in the public interest.
Sierra Club attorney Sanjay Narayan said the group is focused on DOE's approval of exports from a facility in Freeport, Texas. In a pending lawsuit, the club has accused DOE of violating the National Environmental Policy Act by approving exports from Freeport in 2014 without exploring the impact on gas production, coal consumption and greenhouse gas emissions.
"They've allowed FERC to pass the buck to the Department of Energy," Narayan said. "That's essentially the next shoe to drop here."
At issue is DOE's approval of more than a dozen applications to export LNG to countries that lack free-trade agreements with the United States, as well as an additional 28 applications under review.
Christi Tezak, a managing director of the research firm ClearView Energy Partners LLC, in an email to clients this week noted that a Democratic appointee, Judge Patricia Millett, made "apparent suggestions" on what environmentalists might consider as effective arguments when challenging DOE's approvals to non-free-trade countries under NEPA.
While Tezak expects the agencies to continue approving export applications under the Natural Gas Act, she also said environmental reviews will take longer and be more expensive as appeals continue.
Yesterday's court ruling represented a win for oil and gas interests, and one industry source said a string of similar challenges before FERC are likely to be resolved in a similar manner.
Still, companies keen on exporting gas have made no secret of their frustration with the Sierra Club's legal tactics.
The American Petroleum Institute told the D.C. Circuit that its members find themselves "the ultimate target" of the group's "persistent" litigation challenging FERC's regulatory actions. API in a document filed with the court also accused the Sierra Club of trying to slow or stop the regulatory process to block the expansion of gas infrastructure.
Charlie Riedl, executive director of the Washington, D.C.-based Center for Liquefied Natural Gas, said the litigation makes for longer environmental reviews, but the push to export gas is still moving forward.
"It slows things down," Riedl said. "As far as the ability to move forward, my members remain confident that they are following the letter of the law and meeting or exceeding what's required in that review process. The lawsuits obviously slow things down, they cost time and money not only for these projects but for taxpayers as well."
Riedl said he was encouraged by the court's finding that FERC's environmental review was sufficient. If the Sierra Club makes the same arguments in its case against DOE, Riedl said the court will likely side with the Obama administration.
"I think the opinion basically clarified that there really isn't anything they can specifically point to that says NEPA wasn't [met or complied with]," he said.
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