Commissioner Richard Glick Dissent regarding Freeport LNG Development, L.P. and FLNG Liquefaction 4, LLC

Commissioner Richard Glick Statement

May 16, 2019

Docket No. CP17-470-000

I dissent from today’s order because it violates both the Natural Gas Act1 (NGA) and the National Environmental Policy Act2 (NEPA). The Commission again refuses to consider the consequences its actions have for climate change. Neither the NGA nor NEPA permit the Commission to assume away the climate change implications of constructing and operating a liquefied natural gas (LNG) facility. Yet that is precisely what the Commission is doing today.

In today’s order, the Commission authorizes, under section 3 of the NGA, Freeport LNG Development, L.P and FLNG Liquefaction 4, LLC’s (jointly, Freeport LNG) proposed “Train 4 Project,” (Project) which would allow Freeport LNG to liquefy for export an additional 5.1 million metric tons per annum of LNG (equivalent to approximately 0.74 Bcf per day of natural gas), at Freeport’s existing LNG terminal near Freeport, Texas.3 In so doing, however, the Commission treats greenhouse gas (GHG) emissions differently than all other environmental impacts. By refusing to assess the significance of the impact of the Project’s GHG emissions, even after quantifying them, the Commission not only neglects its obligation to assess the environmental impacts, but also its concomitant duty to explore possible mitigation measures to reduce any significant adverse effects. That not only violates the Commission’s statutory obligations, it is also the critical step that enables the Commission to misleadingly claim that the Project has no significant environmental impact—a finding that plays an integral role in the Commission’s public interest determination. These flaws make today’s order arbitrary and capricious and not the product of reasoned decisionmaking.

The Commission’s public interest determination is not the product of reasoned decisionmaking.

The NGA’s regulation of LNG import and export facilities “implicate[s] a tangled web of regulatory processes” split between the U.S. Department of Energy (DOE) and the Commission.4 The NGA establishes a general presumption favoring the import and export of LNG unless there is an affirmative finding that the import or export “will not be consistent with the public interest.”5 Section 3 of the NGA, which governs LNG imports and exports, provides for two independent public interest determinations: one regarding the import or export of LNG itself, and one regarding the facilities used for that import or export. DOE determines whether the import or export of LNG is consistent with the public interest, with transactions among free-trade countries legislatively deemed to be “consistent with the public interest.”6 The Commission evaluates whether “an application for the siting, construction, expansion, or operation of
an LNG terminal” is consistent with the public interest.7 Under that authority, the Commission must approve a proposed LNG facility unless the record shows that the facility would be inconsistent with the public interest.8

As part of that public-interest determination under the NGA, the Commission must examine a proposed LNG facility’s impact on the environment and public safety, including its impact on climate change.9 Nevertheless, the Commission insists that it need not determine whether the Project’s contribution to climate change from increased GHG emissions10 would be significant because it lacks “generally accepted significance criteria” for GHG emissions.11

However, the shocking part of the Commission’s rationale is what comes next. Notwithstanding this alleged inability to assess significance of that environmental impact, the Commission concludes that the Project will not significantly impact the quality of the human environment.12 That is the equivalent of concluding that an action known to be dangerous13 is actually safe because we don’t consider exactly how dangerous it is.14 In addition to being ludicrous, that reasoning fails to give climate change the serious consideration it deserves and that the law demands, especially given the large volume of emissions that the Project will cause.15

The implications of the Commission’s approach to evaluating the impacts of GHG emissions extend beyond this proceeding. Taking the Commission’s approach to its logical conclusion, the Commission would approve any project regardless of the amount of GHGs emitted without ever determining the significance of their environmental impact. If the Commission continues to assume that a project will not have a significant environmental impact no matter the volume of GHG emissions it causes, those emissions and their consequences cannot meaningfully factor into the public-interest determination. Approving a project that may significantly contribute to the harms caused by climate change without evaluating the significance of that impact or considering it as part of the public-interest determination is contrary to law, arbitrary and capricious, and not the product of reasoned decisionmaking.16

The Commission fails to satisfy its obligations under NEPA.

To evaluate the environmental consequences of the Project under NEPA, the Commission must consider the harm caused by the Project’s GHG emissions and “evaluate the ‘incremental impact’ that these emissions will have on climate change or the environment more generally.”17 Listing the volume of emissions, as the Commission does here,18 is a necessary step toward meeting the Commission’s NEPA obligations. But merely listing a set of figures—without any real attempt to disclose the significance of their incremental impact on the environment as a result of the Project’s GHG emissions—is not enough to satisfy NEPA.19

As an initial matter, identifying the consequences that those emissions will have for climate change is essential if NEPA is to play the disclosure and good government roles for which it was designed. By contrast, the Commission’s approach in this order, where it states the volume of emissions as a share of national emissions and then describes climate change generally, tells us nothing about the “‘incremental impact’ that these emissions will have on climate change.”20 It is hard to fathom how hiding the ball on a project’s climate impacts is consistent with NEPA’s purpose.

The Commission’s assertion that it lacks a widely accepted standard for evaluating the significance of GHG emissions is a red herring. The lack of any single “standard” methodology does not prevent the Commission from adopting a methodology, even if others are available. In any case, the Commission has several tools to assess the harm from the Project’s contribution to climate change, including the Social Cost of Carbon. By measuring the long-term damage done by a ton of carbon dioxide, the Social Cost of Carbon links GHG emissions to actual environmental effects from climate change, thereby facilitating the necessary “hard look” at the Project’s environmental impacts that NEPA requires. Especially when it comes to a global problem like climate change, a measure for translating a single project’s climate change impacts into concrete and comprehensible terms plays a useful role in the NEPA process by putting the harm in terms that are readily accessible for both agency decisionmakers and the public at large. The Commission, however, continues to ignore the tools at its disposal, relying on deeply flawed reasoning that I have previously critiqued at length.21

Regardless of tools or methodologies available, the Commission also can use its expertise and discretion to consider all factors and determine, quantitatively or qualitatively, whether the Project’s GHG emissions have a significant impact on climate change. That is precisely what the Commission does in other aspects of its environmental review. Take, for example, the Commission’s evaluation of the Project’s impact on land use. The EA determined that nearly 240 acres of land would be permanently affected by the Project’s construction, but that such impact is not significant.22 Notwithstanding the lack of any “generally accepted significance criteria”23 as to this particular environmental impact, the Commission still uses its judgment to conduct a qualitative review of the Project’s impact on land use and to assess the significance of that impact. The Commission’s refusal to even attempt a similar qualitative judgment on the significance of GHG emissions is willfully ignorant, and certainly arbitrary and capricious.

The Commission’s refusal to seriously consider the significance of the impact of the Project’s GHG emissions is even more mystifying because NEPA “does not dictate particular decisional outcomes.”24 NEPA “‘merely prohibits uninformed—rather than unwise—agency action.’”25 Taking the matter seriously—and rigorously examining a project’s impacts on climate change—does not necessarily prevent any commissioner from ultimately concluding that a project meets the public-interest standard.

A thorough investigation of a project’s contribution to climate change would also help infrastructure developers by reducing their legal risk in the appeals that will inevitably follow. Indeed, developers themselves are starting to provide more information (unsolicited by the Commission) about the climate-change impacts of proposed projects, clearly recognizing the benefits of greater transparency when it comes to NEPA environmental reviews of such projects.26 At the end of the day, no one benefits from the Commission’s refusal to consider a project’s impact on climate change.

For these reasons, I respectfully dissent.
 

• 11 15 U.S.C. § 717b (2012).
• 22 National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321 et seq.
• 33 Freeport LNG Development, L.P., 167 FERC ¶ 61,155, at PP 4, 6 (2019) (Certificate Order).
• 44 Sierra Club v. FERC, 827 F.3d 36, 40 (D.C. Cir. 2016) (Freeport).
• 55 15 U.S.C. § 717b(a); see EarthReports, Inc. v. FERC, 828 F.3d 949, 953 (D.C. Cir. 2016) (“NGA [section] 3, unlike [section] 7, ‘sets out a general presumption favoring such authorization.’”) (quoting W. Va. Pub. Servs. Comm’n v. Dep’t of Energy, 681 F.2d 847, 856 (D.C. Cir. 1982). Under section 7 of the NGA, the Commission approves a proposed pipeline if it is shown to be consistent with the public interest, while under section 3, the Commission approves a proposed LNG import or export facility unless it is shown to be inconsistent with the public interest. Compare 15 U.S.C. § 717b(a) with 15 U.S.C. § 717f(a), (e).
• 66 15 U.S.C. § 717b(c). The courts have explained that, because the authority to authorize LNG exports rests with DOE, NEPA does not require the Commission to consider the upstream or downstream GHG emissions that may be indirect effects of the export itself when determining whether the related LNG export facility satisfies section 3 of the NGA. See Freeport, 827 F.3d at 46- 47; see also Sierra Club v. FERC, 867 F.3d 1357, 1373 (D.C. Cir. 2017) (Sabal Trail) (discussing Freeport). NEPA still requires, however, that the Commission consider the direct GHG emissions associated with a proposed LNG export facility. See Freeport, 827 F.3d at 41, 46.
• 77 15 U.S.C. § 717b(e); see EarthReports, 828 F.3d at 952-53 (describing division of regulatory oversight between DOE and FERC for LNG export and supporting facilities).
• 88 See Freeport, 827 F.3d at 40-41.
• 99 See Atl. Ref. Co. v. Pub. Serv. Comm’n of N.Y., 360 U.S. 378, 391 (1959) (holding that the NGA requires the Commission to consider “all factors bearing on the public interest”); see also Sabal Trail, 867 F.3d at 1373 (explaining that the Commission may “deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment”).
• 1010 The Environmental Assessment (EA) quantified the Project’s GHG emissions from construction and operation. EA at 191, 197-98 & Tables 28-30; Certificate Order, 167 FERC ¶ 61,155 at PP 35-36.
• 1111 EA at 224 (explaining that “[t]here are no generally accepted significance criteria for GHG emissions,” and “we cannot determine the Train 4 Project’s incremental physical impacts on the environment caused by GHG emissions”); Certificate Order, 167 FERC ¶ 61,155 at P 37 & n.93.
• 1212 See Certificate Order, 167 FERC ¶ 61,155 at PP 35, 40; EA at 235.
• 1313 Even the Commission acknowledges both that climate change is “driven by accumulation of GHG in the atmosphere primarily through combustion of fossil fuels,” EA at 222, and that the Project’s GHG emissions “will contribute incrementally to climate change.” Certificate Order, 167 FERC ¶ 61,155 at P 37.
• 1414 See, e.g., Michigan v. EPA, 135 S. Ct. 2699, 2706 (2015) (“Not only must an agency’s decreed result be within the scope of its lawful authority, but the process by which it reaches that result must be logical and rational.”) (internal quotation marks omitted); see also Motor Vehicle Mfrs. Ass’n, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (Agency action is “arbitrary and capricious if the agency has . . . entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.”); cf. Soundboard Ass’n v. FTC, 888 F.3d 1261, 1274 (D.C. Cir. 2018) (Millett, J., dissenting) (“Why let reality get in the way of a good bureaucratic construct?”).
• 1515 Adding the Project to Freeport LNG’s existing LNG terminal will increase Freeport LNG’s direct operational GHG emissions by more than 540,000 metric tons annually. See EA at 198 & Table 30; Certificate Order, 167 FERC ¶ 61,155 at P 36.
• 1616 See, e.g., Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1322 (D.C. Cir. 2015) (agencies cannot overlook a single environmental consequence if it is even “arguably significant”).
• 1717 Ctr. for Biological Diversity v. Nat’l Highway Traffic Safety Admin., 538 F.3d 1172, 1216 (9th Cir. 2008); see also WildEarth Guardians v. Zinke, No. CV 16-1724 (RC), 2019 WL 1273181, at *1 (D.D.C. Mar. 19, 2019) (explaining that the agency was required to “provide the information necessary for the public and agency decisionmakers to understand the degree to which [its] decisions at issue would contribute” to the “impacts of climate change in the state, the region, and across the country”).
• 1818 Supra n.10.
• 1919 See, e.g., Am. Rivers v. FERC, 895 F.3d 32, 49 (D.C. Cir. 2018) (NEPA requires an agency relying on a “finding of no significant impact” to “make a convincing case” for that finding.) (emphasis added); Id. (FERC’s EA “will pass muster only if it undertook a ‘well-considered’ and ‘fully-informed’ analysis of the relevant issues and opposing viewpoints.”) (quoting Myersville, 783 F.3d at 1324-25).
• 2020 See Ctr. for Biological Diversity, 538 F.3d at 1216.
• 2121 See, e.g., Transcontinental Gas Pipe Line Co., LLC, 167 FERC ¶ 61,110 (2019) (Glick, Comm’r, dissenting in part at P 6 & n.11) (noting that the Social Cost of Carbon “gives both the Commission and the public a means to translate a discrete project’s climate impacts into concrete and comprehensible terms”); Fla. Se. Connection, LLC, 164 FERC ¶ 61,099 (2018) (Glick, Comm’r, dissenting).
• 2222 EA at 94-95.
• 2323 EA at 224 (referencing lack of a “generally accepted significance criteria” for assessing GHG emissions).
• 2424 Sierra Club v. U.S. Army Corps of Engineers, 803 F.3d 31, 37 (D.C. Cir. 2015).
• 2525 Id. (quoting Robertson v. Methow Valley Citizens Coun., 490 U.S. 332, 351 (1989)).
• 2626 See, e.g., Transcontinental Gas Pipe Line Co., LLC, Transco Letter, Docket No. CP17-101, at 2 (filed Apr. 24, 2019) (disclosing estimate of reduced GHG emissions from downstream combustion of proposed project’s capacity replacing No. 2 fuel oil); Transcontinental Gas Pipe Line Co., LLC, Transco Letter, Docket No. CP17-101, at 2 (filed Feb. 27, 2019) (noting that proposed project will displace 900,000 barrels of oil per year and reduce GHG emissions by 200,000 tons per year).