Democrats on the Federal Energy Regulatory Commission flexed their power at a March 21 commission meeting to push for greater analysis of climate change, arguing that a recent bipartisan compromise that led to the first approval of a new LNG export terminal in more than two years will not work as a long-term solution for assessing the climate impacts of terminals and other natural gas infrastructure projects.
Commissioners Cheryl LaFleur and Richard Glick said during the monthly meeting that the deal, which expanded the agency's consideration of greenhouse gas emissions, could still leave FERC orders vulnerable to legal disputes. LaFleur and Glick pointed to challenges to the commission's approvals of gas pipelines and a federal judge's decision March 19 that blocked oil and gas drilling over inadequate climate impact analysis in a U.S. Bureau of Land Management oil and gas lease sale.
"We have been treating climate impacts differently than all the other environmental impacts that we look at in our environmental review," LaFleur said. She called for "more meaningful analysis" like the commission uses to study the effects of projects on wildlife or wetlands.
"I don't believe this approach is going to be sustainable over the long term," LaFleur said.
FERC Commissioner Cheryl LaFleur
Source: Federal Energy Regulatory Commission
The Democrats are in position to push the point as they are evenly matched with Republican Chairman Neil Chatterjee and Republican Commissioner Bernard McNamee after the death of former Chairman Kevin McIntyre. The Republicans need at least one Democrat to join them in any order to issue a Natural Gas Act certificate for gas infrastructure. In recent certificate orders, that Democrat has been LaFleur, but she said at the meeting that she would evaluate gas projects on a case-by-case basis.
LaFleur reached the compromise over climate impact information in an agreement with Chatterjee and McNamee that led to the commission's 3-1 approval Feb. 21 of Venture Global LNG's Calcasieu Pass LNG terminal in Louisiana. The FERC order included an estimate of direct greenhouse gas emissions associated with the terminal and compared the emissions to a national net emissions inventory.
An impasse among commissioners over calculating emissions impacts had stalled votes on such projects and created uncertainty for the LNG industry. After the deal, Chatterjee touted the decision as a breakthrough that positioned the commission to advance LNG export projects on time.
Glick, who had dissented from the order, said during the meeting that "this alleged breakthrough was anything but a breakthrough." Glick repeated his arguments that FERC reviews do not go far enough in assessing the significance of estimated emissions.
In response to the new comments from the Democrat commissioners, McNamee and Chatterjee continued to praise the compromise as an example of the commission's ability to get things done without succumbing to politics, a source of pride for FERC commissioners through the years.
Chatterjee outlined the Republican position, but he spoke of a unified commission. He described the inclusion of direct greenhouse gas emissions in the Calcasieu Pass order as a "major concession" by him and McNamee but one the chairman said would help make commission decisions "legally durable."
Chatterjee said the criticism from LaFleur and Glick will help make the commission's orders stronger. "I still feel very confident that reasonable conversations will continue on the question of [greenhouse gases], and if that is the biggest sticking point, then we've got a good path forward there. I still feel pretty good about the trajectory that we are on."
The chairman emphasized that the commission will always consider each project individually.
Venture Global has yet to announce a formal final investment decision for its Calcasieu Pass terminal, but the project is considered one of the front-runners among U.S. LNG projects. FERC's certificate order authorizing Calcasieu Pass stated that more than 3.9 million tonnes per year of carbon dioxide equivalent in estimated direct greenhouse gas emissions would be associated with the terminal. The commission compared the emissions to the U.S. Environmental Protection Agency's national net emissions estimate as of 2016, finding that Calcasieu Pass could potentially increase those emissions by about 0.07% at the national level. But the order also noted that "there are no national targets to use as benchmarks for comparison."