FERC Green-Lights Two Gulf Coast LNG Export Terminals

On Thursday, the Federal Energy Regulatory Commission (FERC) approved permit applications for Tellurian's Driftwood LNG and Sempra's Port Arthur LNG export terminals on the U.S. Gulf Coast. When including its recent approval for Calcasieu Pass LNG, FERC has green-lighted more than 50 million tonnes per annum (mtpa) in new liquefaction capacity since the start of the year. 

At full build-out, Driftwood  would be able to produce 28 mtpa of LNG. Port Arthur LNG would be smaller at roughly 13.5 mtpa. Neither Tellurian nor Sempra have yet made a final investment decision on the facilities approved Thursday, but both intend to finalize their plans within a year's time. 

"With today's FERC order and the commercial momentum of the Port Arthur LNG project, we are one step closer to reaching a final investment decision and delivering low-cost, reliable and clean U.S. natural gas to world markets," said Carlos Ruiz Sacristán, chairman and CEO of Sempra North American Infrastructure. "Port Arthur LNG should help us achieve our goal to become one of the largest exporters of North American liquefied natural gas."

Split over GHG emissions

The commission is split between Democratic and Republican appointees, and Thursday's 3-1 vote exposed the differences between the two sides - especially on climate change.

Commissioner Cheryl A. LaFleur, who ultimately voted in favor of the two terminals, argued that the commission is required by the National Environmental Policy Act (NEPA) to go further when considering the significance of a project's GHG emissions.

"NEPA requires that we analyze [emissions] information to determine whether a specific impact is, in fact, significant. Unfortunately, to date, the Commission has not established a framework for making a significance determination for GHG emissions," she said. "By any meaningful standard, the magnitude of the direct GHG emissions from the Driftwood LNG Project, 10,641,908 tons a year or an increase of 0.17 percent of the national emissions inventory, appear to be significant as contemplated by NEPA." 

The sole dissenting vote, Commissioner Richard Glick, cited the same issue. "Neither the [Natural Gas Act] nor NEPA permit the Commission to assume away the climate change implications of constructing and operating this liquefied natural gas (LNG) facility. Yet that is precisely what the Commission is doing today," he said, noting that the Driftwood site will directly emit more GHG in one year than all the cars in Kentucky.