Joint Dissent - Commissioner Richard Glick and Commissioner Allison Clements
January 19, 2021
Docket No. CP16-454-002
Order: C-7
We dissent from today’s order because it affirms the Commission’s failure to adequately review a significant design change at Rio Grande LNG, LLC’s (Rio Grande) liquefied natural gas (LNG) facility. In 2019, the Commission issued Rio Grande a certificate under section 3 of the Natural Gas Act (NGA)[1] for an LNG export facility whose core design centered on six natural gas liquefaction trains with a cumulative export capacity of approximately 27 million tonnes per annum.[2] Shortly thereafter, Rio Grande proposed to modify its core design by removing one of the six trains and increasing the maximum export capacity on the remaining five trains so that the total export capacity would not change. Commission staff approved the design change via a delegated letter order, rather than through an amendment proceeding.[3]
That approval was flawed for two reasons. First, going from six trains to five while increasing the capacity of the remaining trains by roughly 20% is a significant change that should have required a formal application to amend the certificate. The number of trains at an LNG facility is arguably the facility’s most salient design element and should not be changed without the degree of Commission scrutiny and review that accompanies an application to amend the certificate. After all, the Commission has a statutory responsibility to evaluate whether the facility is consistent with the public interest, which it cannot reasonably carry out if it approves sweeping modifications to the facility’s design without a full review under section 3.
The Commission’s counterarguments are unpersuasive. It principally contends that it regularly approves design changes at LNG facilities.[4] Although that is true, the examples it identifies only underscore how anomalous it was to approve a change to the core design of an LNG facility without a formal amendment. For example, the Commission points to instances in which Commission staff approved the removal of fencing around the Corpus Christi LNG facility, the modification to the storm surge wall at the Elba Liquefaction facility, and the installation of structural steel and underground piping at Sabine Pass LNG.[5] None of those changes modified the core design of an LNG facility and, accordingly, they do not support the proposition that the Commission can approve a modification this significant without requiring a formal amendment to the certificate.
The Commission’s approach in this order is also inconsistent with how it has handled similar situations at other LNG facilities. For example, in another order issued today, the Commission is approving an amendment to the Golden Pass LNG Terminal LLC’s section 3 certificate to increase its total export capacity.[6] Although that amendment requires no design changes or additional construction, the Commission still noticed the proposal for comment and prepared a supplemental environmental assessment.[7] And yet, in this order, the Commission is performing less analysis for an indisputably more significant change at the Rio Grande LNG facility. That is not reasoned decisionmaking.
In addition, the Commission points to a pair of conditions included in Rio Grande’s Certificate Order to justify its approach in today’s order.[8] In particular, it identifies Environmental Condition 1—which allows Rio Grande to request modification to procedures, measures, or conditions of the Certificate Order, so long as the modifications provide an equal or greater level of environmental protection than the original measure—and Environmental Condition 6—which requires Rio Grande to file detailed maps identifying any proposed route realignments or facility relocations, along with detailed environmental documentation to support its variance request.[9] Those conditions, it argues, vest Commission staff with the discretion to approve all of Rio Grande’s proposed design changes without going through the amendment process.[10]
We disagree. Taken to its logical conclusion, the Commission’s reading of those conditions would allow the Commission to approve almost any level of modification without an amendment, so long as Rio Grande submits a map and asserts that the environmental impacts of that option are no worse than those associated with the option it approved. We do not believe that the Commission can use environmental conditions to sidestep its obligation to ensure that a modified design of a previously approved LNG facility remains consistent with the public interest.
Second, the Commission should have prepared a supplemental National Environmental Policy Act (NEPA) analysis to consider the environmental, reliability, and safety effects of eliminating one train and increasing the export capacity on the remaining five. The Commission also should have taken public comment on that analysis. The Council on Environmental Quality’s regulations require a supplemental environmental analysis when an agency makes “substantial changes to the proposed action,” or where there are “significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts.”[11] Changing the number of liquefaction trains and substantially increasing the export capacity of the remaining trains qualifies as a “substantial change,” which requires supplemental NEPA analysis.
Performing a supplemental NEPA analysis is particularly important here, given the lackluster environmental review that the Commission performed in these proceedings. The Rio Grande facility is one of three LNG export facilities recently approved for a single ship channel in Brownsville, Texas.[12] Siting such significant projects in that area raises serious environmental justice concerns.[13] The Commission, however, has never adequately confronted those concerns, instead taking the untenable still-hard-to-fathom position that the facilities do not raise environmental justice concerns because their impacts fall almost exclusively on environmental justice communities.[14] In addition, the Commission has already once had to redo its environmental analysis after failing to identify a potential violation of the National Ambient Air Quality Standards due to these projects.[15] Finally the Brownsville, Texas projects will have a significant adverse effect on endangered species, including the ocelot and jaguarundi.[16] Under those circumstances, it is particularly important to perform a NEPA analysis. Doing so would have allowed the Commission to fully consider the impacts of Rio Grande’s proposed design changes on the surrounding environmental justice communities and endangered species and whether, in light of those changes, other steps are appropriate to lessen those impacts.
For these reasons, we respectfully dissent.
[1] 15 U.S.C. § 717b.
[2] Rio Grande LNG, LLC, 169 FERC ¶ 61,131 (2019) (Certificate Order); (Glick, Comm’r, dissenting), order on reh’g, 170 FERC ¶ 61,046 (2020) (Glick, Comm’r, dissenting).
[3] August 13, 2020 Letter Approving Design Change Proposals from the Director, Division of LNG Facility Reviews and Inspections, Office of Energy Projects (Letter Order).
[4] Rio Grande LNG, LLC, 174 FERC ¶ 61,048, at P 7 (2021) (Order).
[5] Id. n.19.
[6] Golden Pass LNG Terminal LLC, 174 FERC ¶ 61,053 (2021).
[7] Id. P 6.
[8] Order, 174 FERC ¶ 61,048 at P 4 n.12, P 7, P 16 n.53.
[9] Certificate Order, 169 FERC ¶ 61,131 at App., Environmental Conditions Nos. 1 & 6.
[10] Order, 174 FERC ¶ 61,048 at P 16.
[11] 40 C.F.R. § 1502.9(c)(1).
[12] The others are the Annova LNG Common Infrastructure, LLC facility, Annova LNG Common Infrastructure, LLC, 169 FERC ¶ 61,132 (2019), and the Texas LNG Brownsville LLC facility, Texas LNG Brownsville LLC, 169 FERC ¶ 61,130 (2019).
[13] Rio Grande LNG, LLC, 170 FERC ¶ 61,046 (Glick, Comm’r, dissenting at PP 10-14).
[14] Id. PP 69-70; id. (Glick, Comm’r, dissenting at P 11) (pointing out that the underlying order dismisses environmental justice concerns because “no environmental justice communities are ‘disproportionately affected’ by the Project since almost all the communities affected—96 percent of the relevant census tracts—are either low-income or minority communities. In other words, the Commission concludes that because the Project basically affects only low-income or minority populations, its effects do not fall disproportionately on those communities.”) (citations omitted).
[15] Id. P 55.
[16] Id. (Glick, Comm’r, dissenting at P 16) (discussing how “the cumulative effects of the Brownsville LNG facilities will have a significant adverse impact on endangered species, including the ocelot, the jaguarundi, and the aplomado falcon”).