Tuesday 21 November 2017

Environmental Groups Challenge Maryland Liquefied Natural Gas Facility Before D.C. Circuit Court

UPDATE (July 19, 2016): On July 15, 2016, the D.C. Circuit Court issued their decision to allow the Federal Energy Regulatory Commission permits to stand in a case Waterkeepers Chesapeake has actively been working on - EarthReports, Inc., et al. v. FERC. The case is informally known as the “Cove Point” case. Environmental groups challenged the Federal Energy Regulatory Commission’s (FERC) approval of Dominion Resource’s liquefied natural gas (LNG) export facility on the Chesapeake Bay at Cove Point, ln Lusby, Maryland.  

The facility would be the first natural gas export facility on the Atlantic Coast. It is expected to send out more than 5 million metric tons of fracked gas a year.  The facility will have a major environmental impact not only because the source of the gas is from hydraulic fracturing, or “fracking” in the Marcellus Shale, which includes the states of New York, Pennsylvania, West Virginia and Maryland, but also because there is a potential for catastrophic environmental impacts should a failure occur at any point along the pipeline. Waterkeepers Chesapeake and other groups that work to protect the environment and water quality have been fighting Dominion Resources LNG expansion since 2013.

Fracking is associated with serious negative environmental and public health consequences not limited to groundwater and drinking water contamination, earthquakes and permanent geologic damage, climate change and, according to a recent Johns Hopkins study, even an increase in serious asthma incidents for residents who live near fracking wells.

In the case, environmental groups argued that FERC failed to properly follow the National Environmental Policy Act (NEPA) when it issued its Finding of No Significant Impact (FONSI) for the facility (see below for information from the April 2016 hearing of the case).  

Although the export facility will likely have a major environmental impact due to increased fracking in the Marcellus Shale region, the Court found that FERC was not required to consider ‘indirect effects’ like increased fracking and associated climate impacts in its approval of the facility.  It is the Court’s view that the Department of Energy (DOE) is the agency responsible for the final decision as to whether exports from the LNG facility will occur, stopping the chain of causation between FERC’s approval decision and the effects of increased fracking.

The purpose of NEPA is to ensure that the federal government gives consideration to environmental concerns prior to taking any major federal action that could significantly affect the environment.  Waterkeepers Chesapeake, as stewards of our local rivers and the Bay, believe there has been a systematic failure among agencies, including FERC, to take environmental considerations more seriously and adequately consider the environmental impacts of major projects.



(Washington D.C.) – Tuesday, the D.C. Circuit Court of Appeals heard arguments from Earthjustice and others regarding the Federal Energy Regulatory Commission’s (FERC) approval of Dominion Resource’s liquefied natural gas (LNG) export facility on the Chesapeake Bay in Lusby, Maryland. This would be the first export facility on the Atlantic Coast and is expected to send out more than 5 million metric tons of liquefied natural gas every year.

In the early fall of 2014, FERC initially approved Dominion Resources request to convert its LNG import terminal into an export terminal --  a $3.8 billion dollar expansion. Since that time, local residents and businesses, environmentalists and public health advocates, including Waterkeepers Chesapeake, have been actively fighting this expansion and argue that FERC failed to properly follow the National Environmental Policy Act (NEPA) when it issued a Finding of No Significant Impact (FONSI) for the facility.

“It is a crime that the construction of the LNG export facility has continued unabated since late 2014. FERC and our public officials have dismissed the health and safety of the residents of Calvert County and people throughout the Chesapeake region,” said Betsy Nicholas of Waterkeepers Chesapeake. “Dominion knows where it will source the fracked gas and knows that new compressor and pipeline capacity will be built. To argue that there won’t be impacts to upstream rivers, streams and drinking water sources is a sham.”

The purpose of NEPA is to ensure that the federal government gives due consideration to environmental concerns prior to taking any major federal action that could significantly affect the environment. Under NEPA, an agency must draft an Environmental Assessment (EA) if the environmental effects of a proposed action are unclear. If it is determined that a proposed action will not have a significant environmental affect, a Finding of No Significant Impact (FONSI) will be issued. If, however, it is determined that a proposed action will have a significant impact on the environment, then a more comprehensive and rigorous Environmental Impact Statement (EIS) must be prepared.  

Before the Court, lawyers for Earthjustice mainly argued that FERC violated NEPA by issuing an EA/FONSI for the Cove Point LNG facility, without pursuing the more comprehensive EIS. Further, FERC’s EA failed to consider the predicted increase in development of gas in the Marcellus Shale region, located just nearby the facility. Indeed, the LNG facility at Cove Point is uniquely positioned on the East Coast to transport gas from Marcellus Shale – the 90,000 square-mile porous rock formation containing as much as 500 trillion cubic feet of methane gas – to international markets. There is no getting around the fact that this LNG export facility will be inextricably connected to the hydraulic fracturing that will take place in the Marcellus Shale region – leading to greater environmental degradation in the surrounding environment and communities. It is projected that the Cove Point facility will cause more greenhouse gas pollution than all of Maryland’s coal-fired power plants combined. Not to mention the fact that the Cove Point LNG facility will be built closer to home residences than any other facility across the country.

Lawyers for FERC and the LNG facility argued that upstream fracking is not causally related to the construction of the LNG facility – stating that Marcellus Shale will continue to be developed regardless of whether this specific facility is built.

Judge Judith Rogers seemed receptive to the arguments from environmental advocates, stating “there has to be some cause and effect, we’re not just planting flowers here.”  She went on to talk about the larger issue of FERC issuing FONSI after FONSI for major projects, implying that FERC needed to take environmental considerations more seriously.

The NEPA process is one of the biggest regulatory hurdles Dominion Energy will have to get through in order to conclude construction in early 2018. Lawyers are now arguing that the U.S. District Court vacate FERC’s FONSI for the project, and require FERC to draft an EIS to more fully consider the environmental impact of the LNG export facility.

Documents:

Waterkeepers Chesapeake et al  Amicus Brief filed November 2015

 

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