American Oil and Gas Reporter - September 2024 - 14

IndustryDigest
Court Faults FERC's OK
On Two LNG Projects
WASHINGTON-The U.S. Court of
Appeals for the District of Columbia
Circuit jumbled the outlook for a couple
of liquefied natural gas export facilities
with an early August decision. The Aug.
6 ruling in City of Port Isabel v. Federal
Energy Regulatory Commission said
FERC should have included a
supplemental environmental impact
statement for new construction
associated with the Rio Grande LNG
and Texas LNG facilities in Cameron
County, Tx. The ruling also concurred
with the plaintiffs' claim the associated
Rio Bravo pipeline project requires
more analysis.
According to court documents, the
litigation originated in a 2021 case
questioning FERC's authorization of the
two LNG facilities and pipeline, in
which the ruling granted the petitions
for review in part and remanded without
vacatur. On remand, the commission
issued orders reauthorizing the projects,
but petitioners have challenged the
reauthorizations by claiming they fall
short of National Environmental Policy
Act and Natural Gas Act requirements.
As in 2021, the court says it agrees
in part. " The commission erroneously
declined to issue SEISs addressing its
updated environmental justice analysis
for each project and its consideration of
a carbon capture and sequestration
system for one of the terminals, " the
decision says. " It also failed to explain
why it declined to consider air quality
data from a nearby air monitor. We deny
the petitions in all other respects. Given
the nature and severity of the flaws in
the commission's second effort to
properly assess the projects, we vacate
the reauthorization orders and remand
to the commission for further
consideration.
" We appreciate the significant
disruption vacatur may cause the
projects, " the ruling adds. " But that
does not outweigh the seriousness of the
commission's procedural defects. "
Press accounts note that the ruling
does not halt the first phase of Rio
Grande LNG construction, which
commenced last year.
Media reports also quote a
spokesperson for Texas LNG who
described the ruling as a procedural
decision to address a technical defect.
14 THE AMERICAN OIL & GAS REPORTER
" We have full confidence FERC will
address this matter judiciously and
efficiently and look forward to working
with them on this important issue, " the
spokesperson is quoted. ❒
Court Sinks Evaluation
Released In Trump Era
About Offshore Activity
GREENBELT, MD.-Antidevelopment
groups are applauding a
federal district court's move to remand
a biological opinion that regulators
issued during the Trump
administration about oil and gas
activities' impact on protected species
in the U.S. Gulf of Mexico.
The Aug. 19 decision in Sierra Club
v. National Marine Fisheries Service in
the U.S. District Court for the District
of Maryland sides with the plaintiffs'
claim that the NMFS and the National
Oceanic and Atmospheric
Administration violated the
Administrative Procedure Act and
Endangered Species Act by issuing a
flawed biological opinion that
underestimated the risks of harm from
offshore activities to protected species,
such as the Rice's whale, while also
taking inadequate measures to mitigate
those risks.
Judge Deborah Boardman's ruling
notes that the NMFS determined that
the Rice's whale population would
experience combined stressors
associated with oil and gas activity, but
the reasonable and prudent alternatives
(RPA) listed in its biological opinion
ignored most of those issues.
" NMFS proposed an RPA to ensure
jeopardy did not ensue. Yet that RPA
addressed only two of the five
stressors upon which NMFS based its
jeopardy finding, " the ruling says.
" And the RPA contained no
explanation of why addressing only
two out of five stressors was good
enough. Making matters worse, the
RPA did not explain how the measures
it adopted would actually mitigate the
risk of jeopardy arising from the two
stressors they purported to assuage.
For these reasons, the RPA is arbitrary
and capricious. "
According to press accounts, the
ruling requires the federal government
to craft a new plan for protecting marine
life from oil and gas activity. ❒
Ruling Scales Back
Biden Administration's
New Pipeline Standards
WASHINGTON-The Interstate
Natural Gas Association of America has
notched a federal appeals court victory
in a case that objects to portions of the
new and revised safety standards that
the U.S. Department of Transportation's
Pipeline and Hazardous Materials
Safety Administration finalized in 2022.
The Aug. 16 ruling in INGAA v.
PHMSA by the U.S. Court of Appeals
for the District of Columbia Circuit
accepted four of the association's five
objections, explaining that " we agree
with INGAA that the agency failed to
adequately explain why the benefits of
the final standards outweigh their costs. "
According to court documents, the
extensive rulemaking process began
with a 2011 advance notice, a 2016
formal proposal and comment period.
After the rule was finalized in August
2022, INGAA expressed general
support for the final version, but urged
PHMSA to reassess several provisions,
a request the agency largely denied.
Although the court sides against
INGAA's objection to the pipeline
segment standard, the ruling says
PHMSA has failed to demonstrate
sufficient benefits for new standards
covering:
· High-frequency electric resistance
welding;
· Crack maximum allowable
operating pressures;
· Dent safety factors; and
· Corrosive constituents.
An analysis by the law firm Snell &
Wilmer says the decision reinforces
federal courts' close attention to agency
decisions in the past year, and entails " a
more technical evaluation to determine
whether the regulations were properly
administered.
" Perhaps even more importantly, the
PHMSA decision also continues a
recent trend away from agency
deference, and towards judicial review, "
the firm continues. " The trend reached a
high point this year when the U.S.
Supreme Court struck down the
longstanding Chevron deference that
afforded agencies the ability to interpret
statutes concerning the scope of their
interpretive authority. By adopting a
more skeptical view of agency
rulemaking procedures, the D.C. Circuit
American Oil and Gas Reporter - September 2024

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