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

(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.