u.s. lng export projects - federal environmental

Presented by:Janna R. Chesno

Law Seminars InternationalNatural Gas for Transportation and LNG

Markets Conference

July 19, 2013Washington, D.C.

U.S. LNG Export Projects -Federal Environmental Considerations

Introduction:2013 CRS Report for Congress

United States expected to go from net importer of natural gas to net exporter by 2020.

Low price of gas means increasing use for power generation and transportation in the U.S. and abroad.

Environmental groups divided on natural gas use.

“The possibility of a significant increase in U.S. natural gas exports will factor into ongoing debates on the economy, energy independence, climate change, and energy security.”

Law Seminars International – July 19, 20132

Law Seminars International | Natural Gas & LNG Project Development | 07/19/13 in Washington, DC

Speaker 16: 1Janna R. Chesno of Van Ness Feldman LLP

U.S. Natural Gas Production, Consumption, and TradeHistorical and Projected Data

Source: EIA natural gas databases, http://www.eia.doe.gov/naturalgas/data.cfm, and EIA’s Annual Energy Outlook 2013 Early Release, Natural Gas Section, reference case, http://www.eia.gov/oiaf/aeo/tablebrowser/.


Select U.S. Natural Gas Import and Export Infrastructure (CRS)




Environmental ConsiderationsAir QualityWetlandsMigratory bird HabitatRiver CrossingsCultural ResourcesHydrostatic TestingDredgingWaterway ImpactsEndangered Species



Key Environmental Permitting Statutes

Clean Air Act 42 U.S.C. §§ 7401 et seq.

Clean Water Act 33 U.S.C. §§ 1341, 1342, 1344

Coastal Zone Management Act 16 U.S.C. § 1456(c)(3)(A)

National Historic Preservation Act 16 U.S.C. §§ 470 et seq.

Endangered Species Act 16 U.S.C. §§ 1531 et seq.




The Natural Gas Act The Federal Energy Regulatory Commission

(FERC) regulates: LNG terminals (a defined term in the statute) Transportation (including storage) and sale for

resale of natural gas in interstate commerce Construction, acquisition and operation of facilities

“The Commission shall have exclusive authority to approve or deny an application for the siting, construction, expansion or operation of an LNG terminal.”

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The Natural Gas Act “‘LNG terminal’’ includes all natural gas facilities

located onshore or in State waters that are used to receive, unload, load, store, transport, gasify, liquefy, or process natural gas that is imported to the United States from a foreign country, exported to a foreign country from the United States, or transported in interstate commerce by waterborne vessel, but does not include—

(A) waterborne vessels used to deliver natural gas to or from any such facility; or (B) any pipeline or storage facility subject to the jurisdiction of the Commission under NGA Section 7




The Natural Gas ActThe U.S. Department of Energy regulates import or export of natural gas (the commodity):

“…no person shall export any natural gas from the United States to a foreign country or import any natural gas from a foreign country without first having secured an order of the Commission authorizing it to do so. The Commission shall issue such order upon application, unless, after opportunity for hearing, it finds that the proposed exportation or importation will not be consistent with the public interest.”



National Environmental Policy Act National Environmental Policy Act (NEPA)

Requires agency take “hard look” at environmental impacts of the proposed action (social, cultural, natural and economic resources)

Not a substantive statute Categorical Exclusion Environmental Assessment (EA) (finding of no significant impact) Environmental Impact Statement (EIS) (major federal action

significantly effecting the quality of the human environment)

FERC is lead agency for coordinating federal LNG export related authorizations and for NEPA

DOE has an independent obligation under NEPA

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Other Key Federal Agencies U.S. Army Corps of Engineers Department of Transportation

Pipeline and Hazardous Materials Safety Administration Maritime Administration

Department of Homeland Security U.S. Coast Guard

Department of Interior Fish and Wildlife Service; National Park Service; Bureau of

Land Management; Indian Affairs

Department of Commerce National Oceanic and Atmospheric Administration

Department of Agriculture Forest Service


FERC Pre-filing Process Mandatory 6-Month process

significant state and local safety considerations that have not been previously addressed (e.g., changing the purpose of the facility)

FERC staff reviews drafts of 13 detailed Environmental Resource Reports

FERC staff begins review and preparation of NEPA document for the project (EA or EIS)

Robust stakeholder process Other federal, state and local agencies Public participation NEPA Environmental scoping





FERC Application Process Formal Application Process (NGA Section 3

Authorization, and NGA Section 7 if applicable) File Application including 13 Resource Reports

(Exhibit F-1 to the Application) EA or EIS (issued for stakeholder comments) Authorization will contain detailed environmental

conditions that must be satisfied by stated deadlines FERC Review of Implementation Plan Issuance of Notice(s) to Proceed with Construction Commissioning and Commercial Operation Approvals

Four-plus years from Application to in-service

SELECTED ENVIRONMENTAL ISSUES & CONSIDERATIONS

LNG Exports




NEPA Document - EA vs. EIS EA – “a concise public document” that serves to

briefly provide sufficient evidence and analysis for purposes of determining whether to prepare an EIS or FONSI

EIS – More comprehensive with longer permitting timeline (preparation of DEIS and public comment period)

EAs are growing longer and longer Project challengers will challenge FERC decision

to issue an EA vs. EIS on numerous grounds


NEPA Cumulative Impacts Analysis Cumulative impacts analysis requires consideration of

“past, present and reasonably foreseeable future actions” MARC 1 Project : 39 miles of 30-inch pipeline in

Pennsylvania; effects of induced production from the Marcellus shale; FERC found this was not causally related to the project; 2nd Circuit concluded FERC took a 'hard look' at the possible effects of the Project in a 296-page EA that thoroughly considered the issues.

Constitution Pipeline - 121-mile natural gas pipeline to connect natural gas production in northeastern Pennsylvania with Northeast markets; CP13-499.




NEPA Segmentation A project may not be segmented into smaller

projects for purposes of avoiding NEPA or preparation of an EIS: Projects that cannot or will not proceed unless other

actions taken previously or simultaneously Functionally inter-dependent parts of a larger project

Tennessee Northeast Upgrade challenger must show more than that the proposed

infrastructure is designed to utilize previously proposed infrastructure


Clean Air Act New U.S. technology brings new challenges

Sabine Pass the only recently permitted U.S. liquefaction facility

State agencies less familiar with liquefaction facilities Title V and PSD permit revisions late in the process

can delay construction of certain facility components

Greenhouse gas issues Opposition to carbon based fuels Fugitive methane emissions




Future of U.S. LNG Exports The current FERC permitting process provides

significant opportunity for public participation and sufficiently balances market needs with the interests of stakeholders, while allowing for thorough environmental review at the federal and state level.

Not all pending projects will be constructed. Some projects will go forward while others will

lag due to contracting issues, financing issues, and delays in permitting.

The risk of legal challenge is relatively high.Law Seminars International – July 19, 201319

Law Seminars InternationalJuly 19, 2013Washington, D.C.

Thank You!

For more information, contact:

JANNA ROMAINE CHESNOVan Ness Feldman, LLP1050 Thomas Jefferson St. NWWashington, D.C. [email protected]/in/chesno/



u.s. lng export projects - federal environmental

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