FERC must regulate small

Mar 18, 2023

The Federal Energy Regulatory Commission should assert authority over small-scale liquefied natural gas export projects, according to a petition filed Friday by seven environmental groups from Vermont to Florida.

The groups, led by the WWALS Watershed Coalition, asked FERC to end its stance that it lacks jurisdiction over LNG projects that aren't connected to a pipeline or don't directly load LNG onto ships for export.

"Without FERC environmental oversight, no-one knows how much risk inland LNG facilities and trucks and trains from them to export locations pose to nearby houses, schools, hospitals, and businesses," the groups said. "And no-one knows how much methane leaks from small inland LNG facilities, trucks, or trains contribute to the recently-discovered much greater methane emissions than previously known."

FERC regulates LNG infrastructure, but in a series of decisions in the mid-2010s found that it lacks the authority to oversee export terminals that don't connect to a pipeline or directly load LNG onto boats.

Those decisions were wrong, according to the environmental groups, which contend the Natural Gas Act gives FERC the authority to oversee all types of LNG projects.

Without FERC jurisdiction, proposed small-scale LNG projects lack a lead federal agency overseeing their review, according to the petition.

"There is no transparency or public involvement in the siting, construction, and operation of small-scale inland LNG export facilities," the groups said.

If FERC declines to start a rulemaking process to revise its LNG policy, it should issue "show cause" orders asking inland LNG projects to explain why they shouldn't fall under the agency's jurisdiction, the groups said.

Groups behind the petition include Local Environmental Action Demanded, Kissimmee Waterkeeper, Our Santa Fe River, Center for a Sustainable Coast, Three Rivers Waterkeeper and Lumber Riverkeeper.

FERC last year found that it had jurisdiction over a small LNG facility in Puerto Rico owned by New Fortress Energy. In that decision, FERC Chairman Richard Glick and Commissioner Allison Clements said the agency should revisit its precedent that an LNG terminal must be connected to a pipeline to fall under the commission's jurisdiction.

But FERC in March unanimously declined to assert jurisdiction over a small-scale LNG export facility planned by Nopetro in Florida. In that project, Nopetro plans to load LNG into containers, drive them a quarter mile and load the containers onto ships for delivery to markets in the Caribbean, Central America and South America. FERC said it doesn't have jurisdiction over the project because the LNG wouldn't be directly loaded onto ships.

Public Citizen may appeal FERC's decision on Nopetro, depending on how the agency responds to its rehearing request, according to Tyson Slocum, director of the consumer watchdog group's energy program. FERC appears ready to issue its response to Public Citizen on Thursday, according to the agency's agenda for its monthly meeting to be held on July 28.

Two New Fortress subsidiaries — Bradford County Real Estate Partners and Delaware River Partners — are seeking FERC orders stating the agency lacks jurisdiction over their planned small-scale LNG projects.