US court directs federal regulators to analyze the emissions of the Louisiana LNG project

A US court ordered federal authorities on Tuesday to examine the impact of greenhouse gas emissions from Commonwealth LNG's Louisiana liquefied natural gas project, potentially delaying full clearances.  

The United States Court of Appeals for the District of Columbia did not reverse the Federal Energy Regulatory Commission's 2022 approval of the project, but it did ask the agency to review the emissions after environmental groups sued, alleging they were not treated seriously.

"We believe it'reasonably possible' that on remand, the Commission may correct the flaws in its (greenhouse gas) emissions and cumulative-effects calculations while still authorizing the Project," the court stated in its judgment.

Five environmental groups, including the Natural Resources Defense Council, sued FERC over the permission, alleging that it did not take climate and air pollution issues seriously when it approved the project in November 2022.

Commonwealth is yet to make a final investment decision (FID). If developed, the project is scheduled to start shipping 9.5 million tonnes of LNG per year from Cameron, Louisiana, in 2028.

Lyle Hanna, a Commonwealth representative, stated that the company will collaborate with FERC during the reassessment and anticipates a FID in the first half of 2025.

Kimmeridge, a private equity group, announced in June that its subsidiary Kimmeridge Texas Gas had purchased a 90% share in Commonwealth LNG.

Democratic members of FERC expressed concerns about the impact of emissions linked to global warming and on communities frequently exposed to other types of pollution in the 2022 approval, claiming that the terminal would emit the equivalent of about 3.5 million tonnes of carbon dioxide per year.

However, they approved the proposal, citing federal natural gas law, which compels FERC to approve facilities unless they are adverse to the public interest.  

The NRDC stated that the decision will assist ensure a "honest" evaluation by FERC. "This verdict confirms what we've been saying for years: FERC continues to breach fundamental national environmental legal requirements to analyze the community and climate implications of LNG projects," said Caroline Reiser, a lawyer for the organization.

It was unclear whether the decision would cause a delay in the project's launch, but it could postpone another crucial approval. ClearView Energy Partners, a nonpartisan research company, stated that the Department of Energy, which has the authority to authorize Commonwealth project exports to key worldwide markets, may not act while FERC considers the emissions impact.