Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

Along Gulf Coast, Gas Export Boom Tests Biden Clean Energy Goals

April 25, 2022, 9:30 AM

As a flare lit up the Cameron, La., night sky, John Allaire served up etouffee with homemade roux, shrimp, and blue crab plucked from his swampy, birdsong-filled 311-acre property on the Gulf of Mexico.

His trailer’s dinner table was stacked with maps, pollution estimates, letters of dissent to the Federal Energy Regulatory Commission, and handwritten logs documenting busy vessel traffic entering the mouth of the Calcasieu River.

The flaring liquefied natural gas export terminal—and the one proposed directly next door—is paving over and polluting a coastline, he lamented, that draws ducks, egrets, brown pelicans, roseate spoonbills, and the threatened eastern black rail.

“This ecosystem is just irreplaceable,” said Allaire, a 66-year-old retired oil and gas environmental manager. “All this prime habitat that’s in there is going to be concrete.”

John Allaire checks a trap on his 311-acre property in Cameron, La.
Photographer: Daniel Moore/Bloomberg Law

The next day, just down the road, Yamen Slaiegh saw a revival of sorts for Cameron.

Slaiegh’s brick-and-mortar restaurant was destroyed in 2020 by back-to-back hurricanes, but demand from the plant’s workers led him to stay. He now operates a food truck, slinging plates of po boys, fajitas, and “hurricane fries” to a busy lunchtime crowd.

“The only thing keeping us alive is the LNG,” Slaiegh said.

‘People Are Waking Up’

The starkly different views show why Southwest Louisiana—with its entrenched oil and gas industry, vulnerabilities to extreme weather and environmental justice grievances—has emerged as a testing ground for the Biden administration’s climate change strategy.

It’s a place where federal officials have confronted an intensifying question in energy and climate policy: Does natural gas count as clean?

The industry views LNG as essential to lowering emissions from developing countries that currently use dirtier-burning fuels like coal and oil.

But environmental groups and residents push back against the entrenchment of the fossil fuel industry—and its entire footprint of drilling, pipelines, and consumption—for decades to come. Methane, the chief component of natural gas, is 84 times more potent as a greenhouse gas than carbon dioxide.

“We have got to begin shifting, instead of doubling down on this thing that we know is suicidal,” said James Hiatt, a former oil refinery worker in Lake Charles who last year joined the Louisiana Bucket Brigade, a New Orleans-based organization founded in 2000 to oppose the industry.

“If we don’t even start heading in that direction, we’ll all be underwater,” Hiatt said. “I think, after the hurricanes, more and more people are waking up.”

James Hiatt, a former oil refinery worker, outside the University United Methodist Church that he attends in Lake Charles, La. Hiatt joined the Louisiana Bucket Brigade last year to advocate against LNG after seeing the job posting on his church’s social media pages.
Photographer: Daniel Moore/Bloomberg Law

Backing Gas in Washington

Over the last decade, Washington energy regulators—who pledge to weigh economic benefits against environmental impacts in approving new projects—have permitted the boom in natural gas exports concentrated on the Gulf Coast.

Seven U.S. gas export terminals operate today concentrated on the Gulf Coast, and 14 more are either commissioning, under construction or approved for construction, according to FERC, which issues certificates to project developers. Another seven have been proposed.

The exports were fueled by fracking, a drilling technique that unlocked vast natural gas supplies in shale formations beginning in the mid-2000s.

Russia’s invasion of Ukraine in February has put political pressure on the White House to keep gas projects flowing as a geopolitical force. Last month, President Joe Biden committed U.S. gas exports to Europe, which imports about 40% of its gas from Russia.

The Energy Department plans to spend $12 billion in carbon capture and storage over the next five years, a move that backs the growing number of LNG companies, including in Cameron, that have announced projects to capture and store some of the greenhouse gases they release. Those projects, which the LNG industry says would offset much of its climate change impact, remain far from proven.

And last month, FERC, after uproar from industry and lawmakers, walked back plans to scrutinize new gas pipeline projects and to set an emissions threshold that would have triggered a more stringent environmental review for pipelines and LNG terminals.

“We recognize that gas plays an important role in the world economy and that comes into play when we cite LNG projects,” FERC Chairman Richard Glick, a Democrat, told reporters after the March 24 meeting. He added that higher energy prices could encourage even more gas project applications.

‘Global Epicenter’ of LNG

LNG terminals are essentially gigantic, energy-guzzling refrigerators. They pipe in natural gas, remove carbon dioxide, hydrogen sulfide, mercury, and other components that could freeze. The gas is then chilled to minus-260 degrees Fahrenheit and compressed by about 600 times. Storage tanks hold the liquid gas, awaiting the next vessel.

The Cheniere Sabine Pass liquified natural gas facility in Cameron, La. Cheniere Energy Inc. is the largest producer and exporter of LNG in the U.S. and the second-largest LNG operator in the world.
Photographer: Mark Felix/Bloomberg via Getty Images

The U.S. exported more than 3.5 billion cubic feet of LNG to three dozen countries in 2021, roughly 20 times the amount exported in 2016, according to the Energy Department, which authorizes gas exports. Among the top destinations are Asian countries and economies relying on coal or dirtier-burning fuels: South Korea, Japan, China, Spain, Brazil.

There are 10 operating or proposed LNG projects along a 25-mile stretch of the Calcasieu River in two Louisiana parishes roughly the size of Delaware, more than one-third of all LNG projects in the country.

“This is the global epicenter of LNG right now,” said Jason French, a LNG consultant who was named in March to lead the LNG Center of Excellence at McNeese State University in Lake Charles.

The 30,000-square-foot center, launched with a $2.75 million Commerce Department grant, was mapped out in blueprints in French’s new office. The center, to be built on a empty lot near campus, is envisioned to train the next generation of LNG workers and serve as a national hub for best practices and research among companies, regulators and academics, French explained.

“It’s very ambitious what we’re trying to do,” French said. “It’s a natural next step for this community with what’s happened with this industry, but it’s also a necessary next step.”

So Wrong We’re Right

Just south of Lake Charles, Cameron LNG greets visitors at its Technology Center, a gleaming building with museum-style placards, a model LNG tanker, and virtual-reality headsets that send viewers through the liquefaction process down to the molecular level.

Outside, an observation deck overlooks a sweeping site where the owners want to expand the plant to a capacity of nearly 19 millions tons per year, up from about 12 million tons per year currently.

The plant was originally designed to import natural gas and regasify it. But after the fracking boom, the terminal flipped to exporting. Cameron LNG, which can load a vessel about every two days, has exported nearly 400 vessels of LNG since 2019.

Stevie Trahan, external affairs manager at Cameron LNG, explains the flaring systems depicted on a large aerial photo near the plant, on April 7, 2022. Trahan, who was born and raised just down the road in Hackberry, La., sees LNG as the future of clean energy.
Photographer: Daniel Moore/Bloomberg Law

“We like to say we were so wrong, we were right,” said Brian Lloyd, a spokesperson for Sempra Infrastructure, whose affiliate Sempra LNG owns Cameron LNG in a joint venture with TotalEnergies, Mitsui & Co., Ltd. and Japan LNG Investment LLC.

By sending gas to countries depending on dirtier fuels, the U.S. is exporting a tool that can lower global emissions, Lloyd said. “We allowed natural gas to be produced very, very cheaply, and the markets have done it on its own.”

Seeking Clean Jobs

The success story of LNG doesn’t resonate with the hurricane-battered neighborhoods Roishetta Ozane knows intimately.

Ozane, a 37-year-old community organizer with Healthy Gulf, is a local problem-solver, constantly fielding phone calls and texts from people going through eviction or curious about an odor from a nearby plant, always willing to pull off the road for a quick prayer with someone. A single mother with six kids, Ozane lost her home in the 2020 hurricanes and lives in a three-bedroom trailer in Sulphur, La., about 30 miles inland from Cameron, in a development originally built as housing for oil and gas workers and leased to the Federal Emergency Management Agency.

Today, she takes visitors—increasingly, reporters from news outlets from across the country—on “toxic tours” of the area, routing her Nissan Pathfinder with 202,000 miles around the Citgo oil refinery and Westlake Chemical plants that can belch steam and smoke, issue flares, and emit powerful odors. She points to neighborhoods that are low-income and majority-Black, their houses still visibly damaged from storms, patched with blue tarps and plywood.

Community activist Roishetta Ozane takes a call at a spot along Calcasieu River where three LNG terminals are proposed, on April 6, 2022.
Photographer: Daniel Moore/Bloomberg Law

Her tours have a bigger point: People in her communities need a paycheck to cover their immediate needs taken care of before they can be asked to stand up against the biggest source of jobs.

Clean energy jobs “have to be good-paying jobs, and they have to be unionized jobs, so that people would even be interested in switching,” Ozane said. “We don’t have anything to offer to replace it.”

Labor unions have struggled to win LNG and pipeline work in Southern states, unable to compete with the lower hourly rates of nonunion labor, according to the Laborers’ International Union of North America, which works on gas infrastructure projects. The union has filed comments with FERC to consider union labor as an economic benefit of LNG development.

“It does make it tough when you have contractors that don’t have a floor to their wages,” said Luke Johnson, international representative for LIUNA’s construction department.

Ozane ends the tour at Calcasieu Point, a popular fishing spot and marina south of Lake Charles near where three LNG plants are planned. Ozane and Hiatt have teamed up to hold monthly sunset gatherings to celebrate a stretch of the river unspoiled by industry, she said.

The organizing effort, in some ways, mimics industry tactics, she said. Louisiana license plates extol its “sportsman’s paradise.” The few hotels south of Lake Charles are booked not just by LNG and construction workers, but by people heading to fish and boat and watch for birds in the Sabine National Wildlife Refuge.

If industry groups are hosting “big fishing tournaments, let’s do that from the environmental perspective and show people how industry is harming those same fish that they have you fishing for,” Ozane said.

All Workers From LNG

Regulators assessing economic promises and environmental impacts are looking at Cameron, which has lost roughly three-quarters of its population over 20 years due to a series of hurricanes.

Calcasieu Pass, operated by Venture Global, sent its first cargoes a few weeks ago and is in FERC’s commissioning phase, meaning regulators are still ensuring “all facets of the terminal are operating as designed,” a FERC spokesperson said in an email. But the company has already proposed a $10 billion expansion and carbon capture initiative that the company announced in a celebratory joint news release with Louisiana’s Democratic governor, John Bel Edwards.

FERC is weighing a new terminal, Commonwealth LNG, across the river and directly next to Allaire’s property.

The ferocity of hurricanes and flooding pose a threat to such facilities, LNG opponents say, but the operators in the region say they can withstand hurricanes by building on higher ground or erecting walls to protect their equipment.

A school board building in Cameron, La., is among the structures being rebuilt following two hurricanes in 2020.
Photographer: Daniel Moore/Bloomberg Law

Economic development officials see LNG as a viable path forward. Workers can get a two-year degree and eventually earn over six-figure salaries, said George Swift, president and CEO of the Southwest Louisiana Economic Development Alliance. The region expects another $50 billion in LNG projects that will carry the region through 2030, Swift estimated.

“We’ve got a tremendous opportunity,” Swift said. “What’s the alternative? Is it to have nothing, and have everybody either leave or not have a job that allows them to raise a family?”

Cameron is still rebuilding from hurricane damage. The library remains empty. A new school board building is encased in scaffolding. But the freshly renovated Cameron Motel and RV Parking is open and doing good business, thanks to plant workers, receptionist Nila Patel said.

“All those trailers you see—all workers, all workers from LNG,” Patel said.

But while Patel, a 27-year resident, has decided to stay for the business, the room bookings also showed that permanent residents were not returning, she said. Most of her customers are people from other areas who go home on days off to be with their families, she said.

At the nearby ferry landing, which takes workers into Cameron from the river’s west bank, a line forms ahead of shift changes, the license plates almost all from Texas.

Yamen Slaiegh operates a food truck serving LNG plant workers in Cameron, La.. After his brick-and-mortar restaurant was destroyed by hurricanes, “the only thing keeping us alive is the LNG,” he said.

Yamen Slaiegh’s food truck, which operates alongside a laundry service for workers, is doing well, but business is down compared with the plant’s peak construction workforce. He’s looking forward to the proposed plant expansion, he said.

“This used to be a beautiful town,” he said. “Not any more.”

‘Until They Tell Me I Can’t’

Allaire fumes that his pristine coastline would be destroyed to send gas to other countries, especially China. From his property, which he has owned for almost 25 years, Venture Global has been burning its flare almost all the time, sometimes with black smoke. At night, the flare turns the sky fiery orange for miles.

Venture Global did not provide an interview for this story, but a Louisiana Department of Environmental Quality spokesperson said the plant was operating the vent and flare systems to “allow for safe disposal of plant-relieved gases” as part of the startup process. State investigators have visited the plant in response to complaints, but their reports are not finalized.

Venture Global’s Calcacieu Pass LNG plant in Cameron, La., burns off gas on April 7, 2022, as seen from the opposite bank near Allaire’s property. Federal and state officials are monitoring the plant, which began LNG production this year.
Photographer: Daniel Moore/Bloomberg Law

Allaire has focused on fighting Commonwealth LNG, which would install its flare less than 1,000 feet from his property border. A 26-foot wall around its facility to guard against storms and flooding would send storm surge onto his property, Allaire said, ruining sandy ridges that support wildlife and migratory birds.

The company contends its plant would have a “minimum effect” on drainage patterns because the wall will encase 138 acres of the company’s 400-acre property and a larger water impact area, Commonwealth founder and chairman Paul Varello said in an interview.

“He’s making a mountain out of a molehill,” Varello said. “He doesn’t speak for many people in the community.”

LNG “gives people a reason to come back” after the storms,” he added.

John Allaire displays a map on his kitchen table in Cameron, La., that shows how close Venture Global’s Calcasieu Pass and the proposed Commonwealth LNG plant would be to his property line.
Photographer: Daniel Moore/Bloomberg Law

From his trailer, Allaire vowed to continue to file documents to FERC, participate in webinars, and reach out to environmental lawyers to take up his case.

“I’m gonna keep protesting until they tell me I can’t,” Allaire said.

To contact the reporter on this story: Daniel Moore at dmoore1@bloombergindustry.com

To contact the editors responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com; Gregory Henderson at ghenderson@bloombergindustry.com