Energy Commissioners Reach ‘Breakthrough’ Approval of Natural Gas Export Facility

SEATTLE (Oil Monster):  The Federal Energy Regulatory Commission approved a liquefied natural gas export terminal in Louisiana on Thursday night, the first step in clearing a backlog of such facilities that the energy industry says is key to sharing the shale revolution abroad.

FERC Chairman Neil Chatterjee cheered the approval of the Calcasieu Pass LNG export project as a “breakthrough” because it would help address a shortage of facilities along the coasts to export liquefied natural gas, or LNG — the chilled, liquid form to which gas must be converted for shipment in giant tanker vessels across the sea.

The $4.5 billion Calcasieu Pass project, funded by the Virginia private equity group Venture Global LNG, will be able to export 12 million metric tons of LNG per year.

Chatterjee voted to approve the terminal along with fellow Republican commissioner Bernard McNamee and Democrat Cheryl LaFleur. The fourth FERC commissioner, Democrat Richard Glick, opposed the terminal because he said “the commission is deliberately ignoring the consequences that its actions have for climate change.”

Chatterjee has made it a priority to speed liquefied natural gas approvals, with only two major export facilities in operation today. He warned in an interview last year with the Washington Examiner that the U.S. could “miss this U.S. energy moment” if it did not certify more of the export projects.

A dozen other facilities are awaiting permit approval from FERC, a backlog the panel has struggled to meet because of a manpower shortage and other issues with the permitting review process. It had been two years since FERC approved a new LNG export terminal.

Chatterjee said the breakthrough came because the commissioners who approved the Louisiana facility agreed on a smoother process to review the greenhouse gas emission impacts of the facilities.

The independent commission has faced pressure from environmental groups to grapple with the climate change impacts of its decisions over energy infrastructure.

“I really appreciate the efforts of my colleagues to work together to come to an agreement on this facility,” Chatterjee said in a statement. “This is significant, as I anticipate we’ll be able to use the framework developed in this order to evaluate the other LNG certificates that the commission is considering.”

FERC had delayed action on the Calcasieu Pass project, fueling speculation that Democrats were hardening against approving LNG facilities.

LaFleur took exception to that claim Thursday night, while noting the agreement over how to review greenhouse gas emission impacts.

Unlike with pipelines, FERC is not responsible for assessing downstream emissions impacts of the exported gas, meaning it does have to measure the emissions from how the exported fuel is eventually used. But FERC is responsible for direct emissions from the facility itself.

“I have been troubled by the narrative that a partisan divide @FERC would prevent action on LNG exports,” LaFleur said in a Twitter post. “Today’s order demonstrates that @FERC can act when commissioners are engaged and willing to compromise. I remain committed to moving our work forward, but will continue to consider each project on the merits.”

Glick, in opposing the project, credited the commission for measuring the greenhouse gas emissions of constructing and operating the LNG facility, finding it would directly create nearly 4 million tons of greenhouse gas emissions annually. But he said his fellow commissioners did not sufficiently assess the impact those emissions would have on climate change and whether the potential harm of that pollution was more damaging than the project's economic benefits.

"I cannot countenance an approach that acts as if climate change is not relevant to the public interest," Glick wrote in his dissent.

The U.S. has been challenged to play catch-up on LNG facilities to meet growing demand for natural gas.

That’s because before the shale boom, the U.S. was expected to become a big importer of LNG, and import terminals were built in preparation for it. But drilling in shale fields over the last decade has unlocked massive new sources of gas, far more than the U.S. consumes. As a result, America has become a net exporter of natural gas.

To deliver on that promise, companies had to transform expensive terminals equipped to import LNG into ones that can export it. The Trump administration has heralded the shift, predicting American LNG could reduce Russia’s dominance of Europe’s natural gas supply and help clean up the air in countries with increasing demand for energy, such as China and India. Natural gas, a fossil fuel, emits about half as much carbon dioxide as coal.

Courtesy: www.washingtonexaminer.com