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Commonwealth LNG Plant Wins FERC Approval Amid Equity Fears (1)

Nov. 17, 2022, 3:53 PMUpdated: Nov. 17, 2022, 9:44 PM

US energy regulators voted unanimously on Thursday to approve a new liquefied natural gas facility in Louisiana’s Gulf Coast despite Democratic commissioners expressing concern over the project’s environmental justice and climate impacts.

The Commonwealth LNG project in Cameron, La., was proposed to add 8.4 million tonnes per year of liquefaction capacity. Environmental groups strongly opposed the facility, which would be located across a ship channel from an LNG facility, operated by Venture Global, and another proposed plant.

Richard Glick, chair of the Federal Energy Regulatory Commission, said Thursday the commission had followed legal precedent under the Natural Gas Act, which has a lower bar for liquefied natural gas projects than for natural gas pipelines.

But Glick said the commission should consider the project’s climate change impacts. The LNG facility would cause 3.5 million tons of direct carbon dioxide emissions per year, he noted.

“I still am at a loss as to why we don’t at least assess the significance of the greenhouse gas emissions,” Glick said.

He added the commission found the specific project wouldn’t specifically impact the health of the local residents.

‘Must Do More’

Democratic Commissioner Allison Clements said the project will affect environmental justice communities.

“The commission must do more to help the communities who are impacted by our decisions,” Clements said.

The order encourages Commonwealth to work with the community on emergency response plans to LNG issues, and Clements said future orders should make those commitments mandatory.

Willie Phillips, the third Democratic commissioner, also expressed concern about the cumulative impacts of so many LNG facilities in one region. The hurricane-ravaged area of southwest Louisiana has about 10 LNG facilities that are operating, under construction or proposed.

“This is a lot for any community,” Phillips said. “I have deep reservations about consolidation and negative visual impacts of this facility on this small town.”

But Phillips said the developer’s mitigation was “consistent” with the commission’s regulations.

Public Interest Debate

Environmental groups decried the commission’s order allowing another LNG facility in a region threatened by coastal erosion and sea-level rise.

“This gas export terminal is clearly not in the public or national interest, and certainly not in the interest of the people and communities they are trying to build in,” said James Hiatt, a former oil and gas worker who serves as southwest Louisiana coordinator for the Louisiana Bucket Brigade, an anti-LNG group.

“FERC has shirked its duty to center its permitting responsibility on the people and communities that would be most impacted by the project,” Hiatt said.

The company has promised to operate safely and be a good neighbor. It plans to reach final investment decision by the middle of next year and begin operation in 2026.

“We’re extremely pleased to have our FERC order in place,” said Paul Varello, Commonwealth’s founder and executive chairman. “FERC review and approval is a rigorous process and a huge step in the development of any LNG project.”

—With assistance from Naureen Malik (Bloomberg News)

(Updated with comments from Hiatt and Varello in paragraphs 13 through 17.)

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

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com