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Commissioner Cheryl A. LaFleur
February 21, 2019
Docket Nos.
CP15-550-000, CP15-551-000, CP15-551-001 PDF

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Concurrence regarding Venture Global Calcasieu Pass and TransCameron Pipeline

  1. Today’s order grants authorization to Venture Global Calcasieu Pass, LLC, pursuant to section 3 of the Natural Gas Act (NGA),1 to site, construct and operate a new liquefied natural gas (LNG) export terminal (Calcasieu Pass Project) in Cameron Parish, Louisiana.2 The Commission also authorizes TransCameron Pipeline, LLC (TransCameron), pursuant to section 7 of the NGA,3 to construct and operate a pipeline, the East Lateral Project, to provide up to 2,125,000 dekatherms per day (Dth/day) of natural gas transportation service to the proposed export terminal. For the reasons discussed below, I concur.

  2. Under section 3 of the NGA, oversight for LNG export is divided between the Commission and the U.S. Department of Energy (DOE). Specifically, it is the DOE, not the Commission, which retains the exclusive authority over the export of the natural gas as a commodity, including the responsibility to consider whether the exportation of that gas is in the public interest.4 If the export will be sent to a free trade country, the NGA automatically “deems” the export “to be consistent with the public interest.”5


  3. This framework leaves the Commission with the limited authority to approve or deny an application for the siting, construction, expansion, or operation of the LNG terminal facilities. In exercising its section 3 authority, the Commission’s responsibility includes conducting a public interest analysis to consider the technical and environmental aspects of the LNG facilities themselves. Our environmental review is governed by the National Environmental Policy Act (NEPA) which, as relevant here, requires the Commission to take a “hard look” at the potential environmental impacts that could result from the Calcasieu Pass Project, including the climate change impacts of the proposed project.


  4. The U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) has made clear that the DOE, rather than the Commission, has the responsibility to assess upstream and downstream indirect impacts of LNG exports as part of the DOE’s determination of the public interest in exporting the natural gas.6 However, the Commission still has the clear responsibility to disclose and consider the direct and cumulative impacts of the proposed LNG export facility, in order to satisfy our obligations under NEPA and section 3 of the NGA.


  5. I appreciate that the Commission has in fact disclosed in the Certificate Order the direct GHG emissions of the Calcasieu Pass Project, and has provided important context by comparing them to the national GHG emissions inventory.7 We have included this comparison in the past to provide context to the indirect emissions of pipeline projects, and the D.C. Circuit has taken note of the Commission’s efforts to use available national, regional, and state emissions inventories as part of our climate change analysis.8


  6. I acknowledge that the disclosure of the national comparison data is only the first step to assist the Commission in ascribing significance to a given rate or volume of GHG emissions as part of our climate change analysis. The magnitude of the direct GHG emissions from the Calcasieu Pass Project certainly appear to be significant, as contemplated by NEPA. However, to date, the Commission has not identified a framework for making a significance determination. As I have previously explained, using the Social Cost of Carbon9 could enable the Commission to assess the significance of GHG emissions.10 While the Commission has argued that monetizing climate damages through the Social Cost of Carbon does not readily lend itself to the Commission’s environmental review of natural gas facilities, I am confident that, given the importance of this issue, the Commission could find a way to adapt and apply a metric such as the Social Cost of Carbon to reach a significance threshold determination. Indeed, the Commission makes challenging determinations on quantitative and qualitative issues in many other areas of our work, but has simply chosen not to attempt a significance determination in this context.11 While making a significance determination on GHG emissions could be difficult, that challenge does not relieve the Commission of its responsibility to address this issue.


  7. With regards to cumulative impacts analysis, I appreciate the work done in the final EIS to address a range of resources impacted within the identified geographic scope of the Calcasieu Pass Project. However, I disagree with the Commission’s failure to disclose and discuss cumulative potential direct GHG emissions associated with Calcasieu Pass Project, as well as the other projects identified in the final EIS within the 50 kilometers air region.12


  8. A NEPA cumulative impacts analysis considers the effect of the current project along with any other past, present or likely future action in the same geographic region.13 Commission staff considers the geographic scope for cumulative impacts for traditional air pollutants such as criteria pollutants (nitrogen oxides [NOx], sulfur oxides [SOx], particulate matter [PM], etc.), volatile organic compounds, and hazardous air pollutants to be the local air quality region, such as an individual valley or basin, large airsheds, or a specific distance from the jurisdictional activity based upon historical air quality models (e.g., 50 kilometers).14 However, GHG emissions are not included in the cumulative impacts analysis because the impacts of GHG emissions are not local or regional.


  9. I disagree with the decision to exclude these emissions from the cumulative impacts analysis. I believe it would take minimal effort to disclose the direct GHG emissions for the other projects identified in table 4.13.1.1-1 of the final EIS, and include an estimate of the total annual potential GHG emissions associated with the Calcasieu Pass Project and those other projects as part of our environmental review.15 Notably, five of the projects listed in the final EIS are LNG projects that have considerable direct GHG emissions.


  10. I recognize that GHG emissions are not typically measured on a local or regional basis, but at a national or global level. Given this, the fact that proposed LNG export facilities are clustered in close geographic proximity does not lead to a different impact than if they were more geographically distributed. I also recognize that it is difficult to balance these impacts with the potential public benefits of export, since the latter are part of DOE’s responsibility, not part of the Commission’s public interest determination. This division of authority makes assessing the climate impacts of LNG export very complicated. However, it is clear that the liquefaction of natural gas for export has meaningful GHG consequences.16 I believe at a minimum direct GHG emissions must be disclosed and considered, both cumulatively and with respect to individual facilities. Since the other air-related cumulative impacts were assessed geographically using the 50 kilometers zone, I have displayed the direct GHG impacts in the same way in the chart PDF


  11. As with recent pipeline orders, I am attempting to assess LNG projects as I believe the law requires, despite the complications of the Commission’s shared authority with the DOE and my concerns regarding how the Commission limits its disclosure and discussion of GHG emissions. I will continue to consider and evaluate these issues as they arise in individual proceedings. However, given my review of the record and the governing law as I read it, I find the Calcasieu Pass Project is not inconsistent with the public interest.17


  12. As for TransCameron’s East Lateral Project, which is solely serving the Calcasieu Pass Project, I find the pipeline is in the public convenience and necessity. The D.C. Circuit has recognized that, as with the appended LNG export facility, the downstream indirect GHG emissions for the pipeline are not part of the Commission’s environmental review and consideration.18 Therefore, my public interest determination is based on a review of the rest of the environmental review of the pipeline project. After carefully balancing the need for the project and its environmental impacts, I find the project is in the public interest.


For all of these reasons, I respectfully concur.






                                               

    1 15 U.S.C. § 717b (2012).
    2 Venture Global Calcasieu Pass, LLC, 166 FERC ¶ 61,144 (2019) (Certificate Order).
    3 15 U.S.C. § 717f(c) (2012).
    4 15 U.S.C. § 717b(a)-(c) (2012). 5 15
    5 15 U.S.C. § 717b(c) (2012).
    6 Sierra Club v. FERC, 827 F.3d 36, 47 (D.C. Cir. 2016) (Freeport) (“[T]he Commission’s NEPA analysis did not have to address the indirect effects of the anticipated export of natural gas. That is because the Department of Energy, not the Commission, has the sole authority to license the export of any natural gas going through the Freeport facilities.”). See also Sierra Club v. FERC, 827 F.3d 59 (D.C. Cir. 2016) (Sabine Pass); EarthReports, Inc. v. FERC, 823 F.3d 949 (D.C. Cir. 2016).
    7 Certificate Order at P 112. Final EIS at Table 4.11.1-5.1 and 4-297. See Sierra Club v. FERC, 867 F.3d 1357 at 1374 (D.C. Cir. 2017) (Sabal Trail) (“Quantification would permit the agency to compare the emissions from this project to emissions from other projects, to total emissions from the state or the region, or to regional or national emissions-control goals.”)
    8 E.g., Town of Weymouth, Mass. v. FERC, No. 17-1135, 2018 WL 6921213 (D.C. Cir. Dec. 27, 2018)(per curiam) (speaking approvingly of the Commission’s quantification of the project’s expected GHG emissions, which included a comparison of the Atlantic Bridge Project against state and regional climate change goals.); Appalachian Voices v. FERC, No. 17-1721 (D.C. Cir. Feb. 19, 2019) (per curiam) (dismissing claims that FERC failed to adequately consider downstream climate impacts of the Mountain Valley Pipeline project by noting, among other things, that “FERC provided an estimate of the upper bound of emissions resulting from end-use combustion…”). By comparison, in Sabal Trail, the D.C. Circuit vacated and remanded the Commission’s authorization of the Southeast Market Pipeline Project and directed the Commission to both quantify and consider the project’s downstream GHG emissions or explain in more detail why it cannot do so. In response to the Court order, the Commission quantified the net, gross, and full-burn of downstream GHG emissions and compared them to the state and national GHG emissions inventories.
    9 https://www.epa.gov/sites/production/files/2016-12/documents/social_cost_of_carbon_fact_sheet.pdf
    10 E.g., Florida Southeast Connection, 162 FERC ¶ 61,233 (2018) (LaFleur, Comm’r, dissenting in part); Dominion Transmission Inc., 163 FERC ¶ 61,128 (2018) (LaFleur, Comm’r, dissenting in part); and Florida Southeast Connection, LLC, 164 FERC ¶ 61,099 (2018) (LaFleur, Comm’r, dissenting).
    11Many of the core areas of the Commission’s work have required the development of analytical frameworks, often a combination of quantitative measurements and qualitative assessments, to fulfill the Commission’s responsibilities under its broad authorizing statutes. This work regularly requires that the Commission exercise judgment, based on its expertise, precedent, and the record before it. For example, to help determine just and reasonable returns on equity (ROEs) under the Federal Power Act, Natural Gas Act, and Interstate Commerce Act, the Commission identifies a proxy group of comparably risky companies, applies a method or methods to determine a range of potentially reasonable ROEs (i.e., the zone of reasonableness), and then considers various factors to determine the just and reasonable ROE within that range. See also, e.g., Promoting Transmission Investment through Pricing Reform, Order No. 679, FERC Stats. & Regs. ¶ 31,222, order on reh’g, Order No. 679-A, FERC Stats. & Regs. ¶ 31,236 (2006), order on reh’g, 119 FERC ¶ 61,062 (2007) (establishing Commission regulations and policy for reviewing requests for transmission incentives); Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000, FERC Stats. & Regs. ¶ 31,323 (2011), order on reh’g, Order No. 1000-A, 139 FERC ¶ 61,132, order on reh’g and clarification, Order No. 1000-B, 141 FERC ¶ 61,044 (2012), aff’d sub nom. S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41 (D.C. Cir. 2014) (requiring, among other things, the development of regional cost allocation methods subject to certain general cost allocation principles); BP Pipelines (Alaska) Inc., Opinion No. 544, 153 FERC ¶ 61,233 (2015) (conducting a prudence review of a significant expansion of the Trans Alaska Pipeline System). I also note that the Commission is currently actively considering a broad topic – resilience – whose scope and complexity might similarly require the development of new analytical frameworks for conducting the Commission’s work.
    12Final EIS at 4-275-4-278 Table 4.13.1.1-1
    1340 C.F.R. § 1508.7 (2017).
    1450 kilometers is the distance used in the final EIS and by the EPA for cumulative modeling of large sources of air pollutants. Final EIS at 4-272, Table 4.13-1.
    15In Freeport, Sierra Club argued that the Commission violated NEPA by failing to include in the cumulative impacts analysis, without any geographic or other limiting principles, all LNG facilities in the United States. The Commission limited its cumulative impact analysis to Brazoria County, Texas as the Freeport Project’s geographic study area. The D.C. Circuit upheld the Commission, finding, “given the scant record evidence identifying any reasonably foreseeable and proximate effects of the Freeport Projects themselves (separate from their exports) on national energy markets or emission levels,” it did not act arbitrarily or capriciously. 827 F.3d at 50. Here, by comparison, the air region identified in the final EIS has five LNG facilities along with two FERC-jurisdictional pipeline projects, and two additional non-jurisdictional projects. The Commission has the information on the direct GHG emissions from these projects and could easily disclose that as part of its environmental review.
    16National Energy Technology Lab (NETL), Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States, May 29, 2014. This analysis calculates the life cycle GHG emissions for regional coal and imported natural gas power in Europe and Asia. The cradle-to-grave approach includes GHG impacts of liquefaction.
    1715 U.S.C. § 717b (2012).
    18See Sabine Pass, 827 F.3d at 68.
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