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Sierra Club takes on DOE's impact assessment in latest LNG approval challenge

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Sierra Club takes on DOE's impact assessment in latest LNG approval challenge

The U.S. Department of Energy "clearly" had the tools to model effects of increased LNG exports but failed to use them when granting authorization for the Freeport project to export, the Sierra Club told a federal appeals court hearing the group's challenge.

Sierra Club attorney Nathan Matthews on Feb. 2 told judges with the U.S. Court of Appeals for the District of Columbia Circuit that the DOE can identify the indirect impacts of increased LNG exports, including those that arise from more natural gas production. He pointed to U.S. Energy Information Administration forecasts, which he said could have helped the agency assess certain risks, such as that of ozone pollution near the Haynesville Shale, a natural gas play near the terminal, and in Texas and Louisiana cities like Dallas, Austin and Baton Rouge.

But a lawyer representing Freeport said these impacts are "inherently impossible to predict," in part because the developer does not know where the facility will pull its gas from. "It can literally come from everywhere," attorney Jonathan Franklin said.

John Smeltzer on behalf of the DOE said there "was not a single" impact raised by the Sierra Club that the agency did not consider and that the agency took a "hard look" at Freeport LNG's proposal before granting the project export authorization.

The court is hearing the environmental group's challenge of the DOE's 2014 authorization for Freeport LNG Development LP to export up to 1.8 Bcf/d of natural gas for 20 years from the Quintana Island, Texas, terminal. The case is part of the Sierra Club's latest efforts to quash federal approval of LNG export projects, after the group repeatedly lost challenges that targeted FERC's authorization of export terminals, including the Freeport facility. (DOE Office of Fossil Energy dockets 10-161-LNG and 11-161-LNG, U.S. Court of Appeals for the District of Columbia Circuit 15-1489)

The same court in the Sierra Club's case challenging FERC's approval of the Freeport LNG terminal said the commission does not have to consider climate change and other indirect impacts of increased gas exports for proposed LNG projects and noted that the DOE has "sole authority to license the export of any natural gas."

Following oral arguments, Matthews said he thinks the group has a better chance of success with this case, since "there's no one for the DOE to pass it off to."

"Here the judges again asked, 'Who's going to consider [indirect impacts]?'" Matthews said. "Somebody needs to figure that out."

Some Senate Democrats have called on the DOE to slow its pace of LNG export approvals, calling the agency's current rate "alarming" and saying high volumes of LNG exports could increase domestic natural gas and energy prices and disproportionately affect regions that do not produce large quantities of gas. Proponents of quicker LNG export authorizations hope former Texas Gov. Rick Perry, if confirmed to head the DOE, will expedite the approval process.