The Washington D.C. Court of Appeals sent an LNG permit back to the Federal Energy Regulatory Commission (FERC) on July 16 for reconsideration in an ongoing fight over greenhouse gas (GHG) emissions.

Though not canceling the permit for Commonwealth LNG’s project on the Calcasieu Ship Channel near Cameron, Louisiana, the court demanded that the FERC provide better reasoning on its decision to grant the permit.

At issue is a years-long battle between the two federal agencies over the role GHGs should play in FERC’s permitting process. A similar case involving a railroad project out of the Uinta Basin is headed to the Supreme Court this fall.

The D.C. Court said FERC should consider the “social cost” of greenhouse gas emissions, meaning the total effect of emissions from a project both upstream and downstream.

“The commission’s reluctance to assess the significance of the project’s GHG emissions using the social cost of carbon is not based on an aversion to subjective judgments, nor is it based on a lack of data.  Instead, the commission explained that it has not yet identified criteria that would allow it to non-arbitrarily determine when identified social costs become significant under NEPA (the National Environmental Policy Act),” the court wrote in its ruling.

FERC commissioners have stated that they are required by law to consider only the emissions of a specific project.

In November 2022, FERC awarded Commonwealth LNG a permit to move forward with its project. The Sierra Club and Center for Biological Diversity, among others, filed legal action against the decision, which led to the appeals court’s decision on July 16.

The plaintiffs celebrated the decision, saying FERC should reverse its original permitting decision.

“FERC has a chance to get it right on Commonwealth LNG,” said Nathan Matthews, Sierra Club senior attorney, in an online statement. “Once the full scope of air pollution and greenhouse emissions are taken into consideration, the only conclusion will be for FERC to reverse the approval of Commonwealth LNG.”  

While the appeals court demanded more information behind FERC’s decision, it also stated that it believed the permit could stand with better information from the government agency.

“We think it ‘reasonably likely’ that, on remand, the commission can redress the defects in its GHG-emissions and cumulative effects analyses and still authorize the project,” the judges wrote.

Commonwealth plans to build a 9.5 MMmt/y LNG liquefication and export facility. The company released a statement July 17 saying it remained positive the project would move forward.

“Commonwealth LNG has worked constructively and cooperatively with FERC throughout the development of our facility and will continue to provide all relevant data during the reassessment process,” the statement read. “We continue to target the first half of 2025 for a final investment decision on the project, allowing us to begin producing LNG in 2028.”

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