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FERC rebukes Sierra Club while rejecting request for Elba Island LNG rehearing

FERC rejected the Sierra Club's request for a rehearing on Kinder Morgan Inc.'s Elba Island liquefaction and export terminal, which began construction in November.

In its Dec. 9 decision, FERC refused to hear new arguments against the planned $2 billion, 0.35 Bcf/d LNG export facility near Savannah, Ga. FERC initially issued an approval for the facility's construction June 1.

The commission said that, in the Sierra Club's argument for rehearing it "raises for the first time" a claim that FERC approval of the Elba Island project and the Department of Energy's authorization of LNG exports are "connected actions" for purposes of the National Environmental Policy Act of 1969. As a result, the environmental group claimed, the project could not proceed until the DOE had completed an assessment of exports from the project.

FERC rejected that argument harshly in its statement denying the rehearing.

"We dismiss this argument as it was raised for the first time on rehearing. The Commission looks with disfavor on parties raising issues for the first time on rehearing that should have been raised earlier, particularly during NEPA scoping, in part, because other parties are not permitted to respond to requests for rehearing," the commission said.

FERC also accused the Sierra Club of distorting the concept of "connected actions" to fit its argument.

"The requirement that an agency consider connected actions in a single environmental document is to 'prevent agencies from dividing one project into multiple individual actions.' … The connected action regulation requires an agency to review the whole picture resulting from a proposal before it, 'rather than conduct separate NEPA reviews on pieces of an agency-action jigsaw puzzle.'"

FERC also said the environmental group failed to note that the DOE had already completed an assessment of the Elba Island facility and cleared it for export operations years before the Sierra Club first raised its complaint.

"In 2012 … the Department of Energy/Office of Fossil Energy authorized Southern LNG to 'export domestically produced LNG by vessel from its Elba Island Terminal in Savannah, Georgia up to the equivalent of 182.5 Bcf per year of natural gas for a 25-year term, beginning on the earlier of the date of first export or 10 years from the date the authorization is issued (June 22, 2022),'" FERC said. "The amount of LNG authorized for export by the Department of Energy/Office of Fossil Energy exceeds the capacity authorized by the Commission in the June 2016 Order."