February 2023, Vol. 250, No. 2


FERC’s Pipeline, LNG Project Evaluations Looking at EJ

By James F. Bowe, Jr., Partner, King & Spalding LLP 

(P&GJ) — The Federal Energy Regulatory Commission (FERC) is devoting an increasing amount of attention and staff resources to the evaluation of impacts of interstate natural gas pipeline and LNG terminal projects on environmental justice (EJ) communities (that is, communities with disproportionately large minority and low-income populations).

FERC has taken to heart a 2021 Biden administration directive that federal agencies develop “programs, policies, and activities to address the disproportionately high and adverse human health, environmental, climate-related and other cumulative impacts on disadvantaged communities, as well as the accompanying economic challenges of such impacts.”  (Executive Order No. 14,008, 86 Fed. Reg. 7619 (Feb. 1, 2021.)   

The Commission is now intently focused on EJ issues, and FERC staff is demanding additional information regarding impacts of interstate gas pipeline and LNG terminal construction proposals on EJ communities in essentially all pending Natural Gas Act pipeline and LNG terminal authorization proceedings. 

In August 2021, the U.S. Court of Appeals for the District of Columbia Circuit took FERC to task for the environmental impacts analyses it had performed for three proposed LNG terminal projects in Brownsville, Texas, questioning why it had limited the geographic scope of those analyses to a 2-mile radius around each project site, even though it had determined that emissions impacts of the projects would extend much farther. (Vecinos para el Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321 (2021)).  

The Court remanded the challenged decisions to the Commission to remedy the deficiencies in its environmental justice analyses (and its analyses of the projects’ impacts on climate change). FERC is now considering the proper scope of its EJ analysis of those projects. (Rio Grande LNG, LLC, Docket No. CP16-454, and Texas LNG Brownsville LLC, Docket No. CP16-1216.)   

FERC staff has requested, and the applicants have provided, additional information regarding project impacts on environmental justice communities within a 31-mile (50-km) radius of the project sites. Commission action in these proceedings should provide useful guidance on FERC’s views on the proper geographic scope of its EJ analyses.  

In a final Environmental Impact Statement (EIS) for the Commonwealth LNG Project issued in September 2022 (Docket No. CP19-502), FERC staff found that project impacts on visual resources, when considered in light of visual impacts associated with other facilities in the project area, would be predominantly borne by EJ communities and that those impacts would be disproportionately high and adverse, and significant, even after taking into account the applicant’s proposed visual impacts mitigation measures.   

This may mark the first time FERC staff has found in an EIS that a project would result in disproportionately high, adverse and significant impacts on an environmental justice community. 

In the Commonwealth LNG EIS, FERC staff determined that a 34-mile (54-km) radius around the proposed aboveground project facilities was the appropriate unit of geographic analysis for assessing impacts of the Commonwealth LNG project on EJ communities. 

It identified 91 EJ community block groups (out of 149 in total) within the 34-mile (54-km) radius around the facility (24 of the block groups were identified as EJ populations based on poverty levels, 18 based on the minority threshold, and 49 based on both the poverty and minority thresholds).  

FERC staff found that potential impacts of the Commonwealth LNG project on wetlands, surface water, aquatic resources, recreation, tourism, socioeconomics, traffic, noise, air quality, safety, and visual resources could adversely affect the identified environmental justice communities. 

As to all of these resources other than visual resources, however, FERC staff found that project impacts on EJ communities would be “less than significant.”   

As to impacts on visual resources, FERC staff found that construction of the Commonwealth LNG terminal would result in a permanent change in the viewshed and would add an industrial element to the project area that would be visible from various locations within EJ communities.  

Given the anticipated visual impacts and overall cumulative impacts of the Commonwealth LNG project and other facilities on visual resources in the project area, FERC staff found that the Commonwealth LNG project’s “impacts on environmental justice communities would be disproportionately high and adverse” and significant.  

On Nov. 17, 2022, FERC issued an order granting Commonwealth LNG’s application for authorization to site, construct and operate its proposed LNG export terminal. (Commonwealth LNG, LLC, 181 FERC ¶61,143.) The Commission generally agreed with its staff’s analysis of environmental justice impacts associated with the project.  

It specifically agreed with staff’s conclusion that direct and cumulative visual impacts near the Commonwealth LNG terminal would be predominately borne by EJ communities and thus would be disproportionately high and adverse. It found that taking into account the adverse visual impacts of the Commonwealth LNG project and the cumulative visual impacts of other facilities in the vicinity, the visual impacts on EJ communities would be significant.  

Having found that direct and cumulative visual impacts on environmental justice communities would be significant, FERC directed Commonwealth LNG to implement certain mitigation measures intended to those impacts resources. It required Commonwealth LNG to adopt a facility lighting plan that would reduce visual impacts from facility lighting, to avoid disturbance of native vegetation within the terminal exclusion buffer area, and to plant native trees inside the facility’s exclusion fence to provide some measure of visual screening. 

Interestingly, the Commission concluded that even with the implementation of these mitigation measures “significant direct and cumulative visual impacts would still occur and cumulative visual impacts on environmental justice communities would remain disproportionately high and adverse.”   

Nevertheless, FERC was able to conclude that the Commonwealth LNG project, “if implemented as described in the final EIS, is an environmentally acceptable action.”   

FERC is currently refining its approach to the evaluation of environmental justice impacts, and important questions remain to be addressed by the Commission and reviewing courts.  

Still, it appears from recent cases involving LNG terminal projects that FERC is taking a pragmatic view of its EJ review responsibilities and is prepared to authorize projects even where impacts on EJ communities after mitigation would remain disproportionately high and adverse, and potentially significant.

Author: James F. Bowe, Jr., a partner in the Washington, D.C., office of King & Spalding, focuses on the energy sector, including regulation of the pipeline, oil and gas, and electric power industries, and commercial matters relating to energy production, transportation, storage and use. He can be reached at jbowe@kslaw.com. 

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