u.s. lng export projects - federal environmental
TRANSCRIPT
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.”
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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/.
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Select U.S. Natural Gas Import and Export Infrastructure (CRS)
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Speaker 16: 2Janna R. Chesno of Van Ness Feldman LLP
Environmental ConsiderationsAir QualityWetlandsMigratory bird HabitatRiver CrossingsCultural ResourcesHydrostatic TestingDredgingWaterway ImpactsEndangered Species
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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.
Law Seminars International | Natural Gas & LNG Project Development | 07/19/13 in Washington, DC
Speaker 16: 3Janna R. Chesno of Van Ness Feldman LLP
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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
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Law Seminars International | Natural Gas & LNG Project Development | 07/19/13 in Washington, DC
Speaker 16: 4Janna R. Chesno of Van Ness Feldman LLP
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.”
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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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Law Seminars International | Natural Gas & LNG Project Development | 07/19/13 in Washington, DC
Speaker 16: 5Janna R. Chesno of Van Ness Feldman LLP
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
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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
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Speaker 16: 6Janna R. Chesno of Van Ness Feldman LLP
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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
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Speaker 16: 7Janna R. Chesno of Van Ness Feldman LLP
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
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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.
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Law Seminars International | Natural Gas & LNG Project Development | 07/19/13 in Washington, DC
Speaker 16: 8Janna R. Chesno of Van Ness Feldman LLP
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
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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
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Law Seminars International | Natural Gas & LNG Project Development | 07/19/13 in Washington, DC
Speaker 16: 9Janna R. Chesno of Van Ness Feldman LLP
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
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Thank You!
For more information, contact:
JANNA ROMAINE CHESNOVan Ness Feldman, LLP1050 Thomas Jefferson St. NWWashington, D.C. [email protected]/in/chesno/
Law Seminars International | Natural Gas & LNG Project Development | 07/19/13 in Washington, DC
Speaker 16: 10Janna R. Chesno of Van Ness Feldman LLP