The Federal Energy Regulatory Commission approved an application May 16 to expand the Freeport LNG export terminal under construction in Texas with a fourth train.
The commission's vote was 3-1, on the same lines as votes that approved other projects this year amid an ongoing debate over the agency's analysis of greenhouse gas emissions. The May 16 development during FERC's monthly public meeting marked the commission's fourth authorization of an LNG project in 2019.
Commissioner Cheryl LaFleur, a Democrat, was again the swing vote on a commission that is split between two Republicans and two Democrats. But LaFleur repeated arguments that the current bipartisan deal among three FERC members to incrementally expand consideration of greenhouse gas emissions would not work as a long-term solution for assessing climate impacts of LNG terminals and other natural gas infrastructure.
LaFleur also said FERC's decision to rely an environmental assessment instead of a more extensive environmental impact statement "heightens the legal risk of the commission's continued failure to assess the significance of direct greenhouse gas emissions." In her concurrence, LaFleur pointed to a Sierra Club complaint over the commission's decision to issue the environmental assessment.
LaFleur's fellow Democrat, Commissioner Richard Glick, continued his series of dissents from Natural Gas Act certificate orders for gas infrastructure projects over what he described as the commission's refusal to address the "significance" of impacts of greenhouse gas emissions.
FERC Chairman Neil Chatterjee and Commissioner Bernard McNamee, both Republicans, touted the approval of the Freeport LNG project as a win for the U.S. at a time when the country is a growing exporter of LNG. McNamee said the commissioners had seriously considered greenhouse gas emissions even though they disagreed on how to assess them.
"I know there's a running debate about it, but I emphasize that we have considered all the environmental impacts, including greenhouse gases," McNamee said.
Chatterjee took a similar position. "Climate change is an important concern," the chairman said. "It's a concern of mine. I just respectfully disagree with the notion that recent commission orders have not provided a thoughtful, thorough and legally sufficient environmental review."
In a May 16 statement, Freeport LNG Development LP's founder, Chairman and CEO Michael Smith, called the approval an important milestone. "Having FERC's approval in hand brings us one significant step closer to our goal of moving ahead with train 4 construction later this year," he said. (FERC docket CP17-470)
The first train of the original Freeport LNG project could be ready to ship its first export cargo in July before beginning commercial deliveries in September, with the second and third trains slated to start up in 2020. The project hit a delay caused in part by flooding from Hurricane Harvey in 2017. The project will be able to produce about 15.3 million tonnes per annum of LNG once the first three trains are in service. The fourth train is expected to add 5.1 mtpa of liquefaction capacity.
"We expect the Department of Energy to approve the pending application to export natural gas to non-Free Trade Agreement destinations over the next few weeks," research firm ClearView Energy Partners LLC said in a May 16 note to clients, that also pointed to the remaining divisions among FERC commissioners.
The approval of the Freeport LNG expansion used the same climate analysis framework that FERC used in three other approvals of LNG projects. In April, FERC commissioners approved a pair of certificate orders for Tellurian Inc. proposed Driftwood LNG terminal in Louisiana and the Sempra Energy-led Port Arthur LNG facility in Texas. Those 3-1 approvals hinged on the inclusion of an estimate of direct greenhouse gas emissions associated with the terminals and compared the emissions to a national net emissions inventory.
Chatterjee and McNamee reached the deal with LaFleur to include that language in February, ending an impasse that had stalled votes on LNG infrastructure projects as the Democrats pushed for greater analysis of climate change. The breakthrough resulted in FERC's 3-1 approval of Venture Global LNG's Calcasieu Pass LNG terminal in Louisiana.
"I am very bullish on the prospects of U.S. LNG exports," Chatterjee told reporters after the May 16 meeting. "I'm proud of the action that we've taken today on a bipartisan basis again."