D.C. Circuit Court Allows Cove Point LNG Export Facility to Go Forward

On July 15, 2016, the D.C. Circuit Court issued its decision to allow the Federal Energy Regulatory Commission permits to stand in the case 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, in 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. 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. Potomac Riverkeeper Network believes 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.