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Nopetro pushes back on LNG project jurisdiction, touts emissions benefits

Highlights

Says project aligns with DOE small-scale LNG push

Contends FERC should not stretch into trucking oversight

Nopetro LNG has bolstered its defense of its small-scale LNG facility planned in Florida, touting the lower emissions it says the project would offer and asserting the project is designed for function rather than to evade Federal Energy Regulatory Commission jurisdiction as some challengers have contended.

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Responding to arguments against the project's approach at FERC, Nopetro June 8 outlined positive impacts of the facility, to be located in Port St. Joe in the Florida Panhandle.

"The LNG that Nopetro intends to export will displace diesel fuel and No. 2 oil consumption in markets that are not currently served by cleaner alternative fuels," it said in a June 8 filing at FERC. The company, along with St. Joe Natural Gas Company and Florida state Representative Jason Shoaf in separate comments, also contended the project would contribute meaningfully to economic recovery around Port St. Joe in the aftermath of Hurricane Michael. In defending the project design, Nopetro said it is targeting inland customers that are harder to reach by using ISO container deliveries.

The facility would be located 1,329 feet away from a dock in Port St. Joe and would receive natural gas from two laterals operated by local distribution utility St. Joe Natural Gas. A third-party truck operator would transport the LNG in International Organization for Standardization containers from the facility to an area subleased from Nopetro, where the containers would move to a third-party stevedore at the dock. Nopetro, in its April 20 petition to FERC, said the case presented an opportunity for FERC to confirm that because the LNG will be exported only through ISO containers at the dock, the project is outside the commission's jurisdiction(CP21-179).

The company petitioned FERC to declare the regulator lacks jurisdiction over the facility planned in Port St. Joe that would produce LNG for transport by truck and later shipment by sea to Central and South America and the Caribbean.

The request for FERC to define the limits of its reach follows the commission's March order asserting jurisdiction of New Fortress Energy's LNG terminal, already in operation in the Port of San Juan, Puerto Rico. In that case, FERC found that the New Fortress facility was an LNG terminal subject to commission jurisdiction because it included facilities dedicated to the importation of LNG in foreign commerce, was located at or near the point of import, and included a pipeline that sends out gas (CP20-466).

In response to Nopetro's petition, Public Citizen and Delaware Riverkeeper Network warned FERC against creating a major new loophole in its oversight of export terminals.

Delaware Riverkeeper alleged the proposed Nopetro project is the latest in trend of entities "purposely designing natural gas facilities to take advantage of technicalities in past commission rulings that allow these facilities to escape the public interest review required by the Natural Gas Act."

DOE small-scale rule

In response, Nopetro said it was developing the project to be consistent with DOE's small-scale LNG rule and to export ISO containers to emerging foreign markets not targeted by larger LNG projects due to practical and economic constraints.

As such, Nopetro's Project will support DOE's stated objective of expediting small-scale LNG exports, while "providing significant benefits to [the United States'] trading partners in the Caribbean Central America and South America," Nopetro wrote. "The commission should not impede Nopetro's efforts by asserting jurisdiction over the project," it added.

Countering Delaware Riverkeeper, also Nopetro argued that a DOE delegation order does not govern whether FERC should assert jurisdiction over a project that does not receive gas from a FERC-jurisdictional pipeline, does not export LNG via pipeline, and is not otherwise connected to a pipeline.

Further, Nopetro restated its view that it is not developing facilities at the point of export.

"The commission should not assert jurisdiction over the trucking of LNG in ISO containers, as doing so would introduce needless uncertainty and unreasonably broaden the commission's jurisdiction into an area regulated by another federal agency," Nopetro said.