The D.C. Circuit Court of Appeals issued an order Aug. 6 vacating FERC’s approval of two LNG export facilities in Texas and remanding the cases back to the commission.
The two facilities are in Cameron County, Texas, which borders Mexico. The facilities’ approval already had been in front of the court in appeals filed by Vecinos para el Bienestar de la Comunidad Costera (Neighbors for the Well-being of the Coastal Community). The vacated orders were on remand from those earlier cases.
“The commission erroneously declined to issue supplemental environmental impact statements addressing its updated environmental justice analysis for each project and its consideration of a carbon capture and sequestration system for one of the terminals,” said the decision, authored by a three-judge panel. “It also failed to explain why it declined to consider air quality data from a nearby air monitor.”
Texas LNG Brownsville filed an application in 2016 to build an LNG export terminal on the Brownsville Shipping Channel. Within six weeks, Rio Grande LNG filed to build a second terminal nearby, while Rio Bravo Pipeline Co. filed to build an interstate pipeline to bring fuel to the second facility. The latter two firms are subsidiaries of NextDecade LNG and the joint pipeline/LNG development is called the Rio Grande project.
Rio Grande filed to add a carbon capture and sequestration system to its facility after losing the first round of litigation. It would seek to capture 90% of the CO2 produced by natural gas liquefaction and ship it via pipeline to an underground injection site in Texas.
On remand, the commission did an environmental justice analysis that included gathering new, relevant information. But it declined to order a more formal supplemental Environmental Impact Statement (EIS) under the National Environmental Policy Act (NEPA), which would have required giving parties a chance to comment on its analysis.
Petitioners argued FERC should have done an EIS on the projects on remand. The court agreed. NEPA requires a supplemental EIS when significant new circumstances or information related to environmental concerns of the action are available.
“Here, the pertinent ‘new information’ includes the updated demographic and environmental data submitted by the developers, as well as the commission’s entirely new analysis and interpretation of that data, which are substantially different from the previously conducted environmental justice analysis in the final EIS,” the court said.
The original EIS covered the impact on just a two-mile radius around the projects, which FERC extended to 50 kilometers (31 miles) in the less formal review on remand. The new analysis was significantly longer and, unlike the initial EIS, found “disproportionately high and adverse” impacts on environmental justice communities. FERC also ordered additional mitigation measures.
FERC argued it did not have to do a formal EIS because it reached the same conclusion that the projects would not have major impacts on air quality.
“That explanation is inadequate for two related reasons,” the court said. “First, neither the regulations nor case law condition the requirement to issue a supplemental EIS on a new determination that a particular environmental impact is significant.”
The second reason in FERC’s argument is that environmental justice analyses, even new and expanded ones, are not important enough to require a supplemental EIS unless they also disclose significant impacts on the physical environment.
Effects on environmental justice communities are impacts that are relevant to environmental concerns, which would require a supplemental EIS, the court said.
FERC took comments on how the developers responded to its new analysis, but it did not let other parties comment directly on its conclusions.
“But NEPA’s purpose is to allow the public to see and comment on the agency’s interpretation of data, not just the underlying data itself,” the court said. FERC therefore deprived petitioners and the broader public of an adequate springboard for public comments, which it would have been legally required to consider in its decision.
Rio Grande’s addition of CCS to its project also drew arguments that FERC should have conducted a new EIS based on that change.
“Rio Grande submitted its CCS proposal specifically in response to our 2021 remand — which required the commission to revisit aspects of its environmental analysis and its ultimate approval of the project — such that both approval requests were pending before the commission at the same time,” the court said. “Indeed, Rio Grande implored the commission to consider the CCS proposal as part of the reauthorization process precisely because it viewed the two actions as related and thought that the CCS proposal’s ability to capture most of the terminal’s GHG emissions would make reauthorization more likely.”
On remand, FERC must consider the actions together in its environmental analysis before deciding whether to reauthorize the terminal. Even if Rio Grande decided against moving ahead with the CCS, FERC must study it as an alternative in a new EIS on remand.
The court also criticized FERC for failing to properly consider data from a nearby air monitor, and on remand, it must use the data or supply a reasoned argument for not doing so.
The court noted its decision to vacate the orders could have a significant impact on the two projects, but it was warranted due to FERC’s serious “procedural defects.”
