US federal court sends Commonwealth LNG approval back to FERC for rereview, threatening plant timeline
Updated July 17 to include a comment from Commonwealth LNG.
Startup of Commonwealth LNG LLC’s proposed 9.5 million tonnes/year (tpy) plant in Cameron Parish, La., could slip after a US Court of Appeals for the DC Circuit told the Federal Energy Regulatory Commission (FERC) July 17 to reevaluate its approval of the project to include climate impacts.
FERC’s review, and perhaps reapproval, of the certificate will take some time, ClearView Energy Partners said in a note. “[W]e would expect the earliest Commonwealth LNG can hope for a revised certificate” and Department of Energy (DOE) approval of a non-Free Trade Act authorization is “late 1Q 2025 even if FERC and the DOE were to move quickly,” ClearView said.
The court did not scrap FERC’s 2022 approval of the project but told the commission to reassess the impact of greenhouse gas and other emissions from the plant. Commonwealth has not made a final investment decision, but it has reached agreements for about half of its capacity. The company had expected to begin LNG shipments in 2027 from the 150-acre site on the Calcasieu Ship Channel that also includes six LNG storage tanks, a marine facility consisting of an LNG carrier berth and barge dock, and utilities for electricity generation (OGJ Online, Sept. 5, 2023).
Environmental groups, including the Sierra Club, sued to block the project shortly after it won FERC approval. In the July 16 ruling, Judge Brad Garcia, writing for the 3-judge panel, said FERC had “inadequately explained its failure to determine the environmental significance of the project’s greenhouse gas emissions, and it failed to adequately assess the cumulative effects of the project’s nitrogen dioxide emissions.” He wrote that FERC must “reevaluate its public interest determination” after it completes its new analysis.
'Reasonably likely' FERC reauthorization
“We think it ‘reasonably likely’ that, on remand, the commission can redress the defects in its GHG-emissions and cumulative effects analyses and still authorize the project,” Garcia wrote, adding that the court decided not to toss Commonwealth’s certificate because it would “needlessly disrupt” the company’s construction plans and commercial operations.
Commonwealth first received FERC approval in November 2022, but it awaits DOE’s authorization to export LNG. That process was halted in January when the White House ordered a pause on new export licenses pending a DOE review of the climate and economic impacts of surging LNG exports (OGJ Online, Jan. 26, 2024).
Earlier this month, a US federal court judge in Louisiana reversed the LNG pause, ordering that reviews resume. However, there is no timetable for DOE review (OGJ Online, July 2, 2024).
While Commonwealth’s certificate is still valid, ClearView said it was “highly unlikely” that DOE under the Biden administration would issue an export authorization with the FERC review pending.
In a statement, Sierra Club senior attorney Nathan Matthews called the review a win for communities. “Commonwealth LNG would just be one of eight terminals either proposed or operating in Southwest Louisiana. FERC’s own modeling shows that air pollution in the area will exceed national standards.”
FERC on July 17 said it does not comment on court-related matters.
In a statement, Commonwealth LNG spokesman Lyle Hanna said the company has worked "constructively and cooperatively with FERC" throughout the development of the plant "and will continue to provide all relevant data during the reassessment process" and that a final investment decision on the project is still targeted for first-half 2025, which would allow LNG production in 2028."
Hanna reiterated that the court did not throw out FERC's approval and, instead, suggested that after review, it is "reasonably likely" that FERC would reauthorize the project.
Cathy Landry | Washington Correspondent
Cathy Landry has worked over 20 years as a journalist, including 17 years as an energy reporter with Platts News Service (now S&P Global) in Washington and London.
She has served as a wire-service reporter, general news and sports reporter for local newspapers and a feature writer for association and company publications.
Cathy has deep public policy experience, having worked 15 years in Washington energy circles.
She earned a master’s degree in government from The Johns Hopkins University and studied newspaper journalism and psychology at Syracuse University.
