Today’s Key Takeaways: The real reason DOI cancelled the Cook Inlet lease sale? Biden faces test on future leasing. FERC uses “Environmental Justice” to review proposed LNG terminal. A picture (okay mining graph) worth 1000 words. Why are Environmental Activists blocking green energy?
News of the Day:
New emails undermine official reason for cancelling key oil and gas lease
Kevin Schmidt, AFP National, September 8, 2022
When White House national climate advisor Gina McCarthy accidentally emailed a reporter that a key oil and gas lease sale in Alaska’s Cook Inlet was “cancelled,” officials at the Department of the Interior scrambled for an explanation amid surging gas prices and rampant inflation.
They cited “lack of industry interest” to justify the cancellation, but 500 pages of e-mails and documents from Interior’s Bureau of Ocean Energy Management contain no mention of this excuse in the lease sale until it was publicly announced as the reason.
Americans for Prosperity Foundation obtained these emails and other documents through a Freedom of Information Act (FOIA) request. They reveal that BOEM began drafting the initial memo recommending cancellation of the Cook Inlet lease sale in January 2022.
In an April 12, 2022 email, BOEM staff discussed five bullets about why the lease sale has not yet occurred. “Lack of industry interest” is not cited.
BOEM’s “Director’s Weekly Meeting” summary document dated May 16, 2022 explains that “[i]t is highly unlikely that BOEM will be able to complete the required steps to hold this sale prior to expiration of the 2017-2022 National OCS program on June 30, 2022.”
OIL:
A TEST ON LEASING: The Biden administration faces a big test in the coming weeks and months in how it moves forward with the federal oil and gas leasing program in light of the Inflation Reduction Act’s leasing instructions and recent leasing-related court decisions.
Competing environmental and industry interest groups are lying in wait to see if Interior meets the first on a list of new leasing deadlines this week provided for in the IRA.
They are also watching to see how much onshore acreage — if any — it makes available for new leasing in the coming quarters now that separate judges have ruled on the merits of President Joe Biden’s January 2021 executive action ordering a pause on all new leasing.
Breaking it down: The IRA provides some new requirements for the Interior Department on offshore leasing, while recent court rulings establish new, and in some ways competing, guidance for the agency to consider as to its measure of discretion to carry out or not carry out new lease sales.
Where the IRA is concerned, the most immediately relevant date is Sept. 15. The law requires Interior to accept bids for Lease Sale 257, the lone offshore oil and gas lease sale carried out last year that was subsequently invalidated by a federal judge, no later than 30 days after the law’s enactment. That would be this Thursday.
Oil and gas interests view the provision covering 257, and the language requiring three other offshore lease sales to be carried out, as the final word.
“At this point, Congress has directed [Interior Secretary Deb Haaland] to offer those leases,” one oil and gas industry-aligned source told Jeremy, referring to 257 in particular. “So, the discretion has been removed from the secretary on whether or not to offer those leases. Congress has directed her to do that.”
From the Washington Examiner, Daily on Energy
GAS:
FERC review puts proposed La. LNG terminal under EJ scrutiny
Miranda Wilson, ENERGYWIRE, September 12, 2022
A staff finding could influence the commission’s decision on the proposed Commonwealth LNG project in Louisiana.
A major liquefied natural gas export project on the Gulf Coast of Louisiana would result in “disproportionately high and adverse” impacts for nearby environmental justice communities if completed, staff at the Federal Energy Regulatory Commission concluded in an analysis last week.
The finding could influence the independent commission’s decision on the proposed Commonwealth LNG project, one of eight gas export facilities being developed or under construction in the southwestern corner of Louisiana.
The conclusion — included in the agency’s final environmental impact statement for Commonwealth LNG — suggests a potential turning point in FERC’s consideration of equity and environmental justice effects, according to activists who oppose the project.
Environmental justice refers to the fair treatment and protection of all people from environmental harms. It’s a stated priority of President Joe Biden, who has promised to advance a “whole-of-government” approach to reducing inequities in infrastructure development and pollution.
“Just the fact that they’ve found environmental justice impacts is significant,” said Naomi Yoder, a staff scientist at the environmental group Healthy Gulf.
Slated to begin operating in 2026, Commonwealth LNG would be capable of exporting up to 1.18 billion cubic feet of natural gas per day to markets overseas. Last week, developer Commonwealth LNG LLC announced its first contract to sell gas from its proposed facility to the Australian energy company Woodside Energy Group.
“Our contention remains that this project is not located in an Environmental Justice area, according to governmental statistical criteria,” Lyle Hanna, director of communications at parent company Commonwealth Projects, said in an email. “We continue to be responsive to FERC and remain committed to operate within all federal, state and local regulations.”
FERC did not respond to a request for comment about the new EIS on the project.
FERC’s oversight of liquefied natural gas projects has been under scrutiny as demand for LNG from the U.S. has increased. Over the past year, Republican lawmakers and Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) have accused the agency of processing LNG and gas pipeline applications too slowly.
At the same time, the slew of proposed new gas terminals on the Gulf Coast has stoked concerns from some community members, who’ve argued the projects will harm local fishermen and increase pollution in residential areas that are already located near heavy industrial facilities.
In its environmental impact statement, or EIS, FERC staff concluded that most of Commonwealth LNG’s environmental impacts could be brought to “less than significant levels” or would only occur during the construction phase. However, agency officials found that the facility’s development in tandem with other industrial projects in the area — including other LNG terminals — would result in adverse cumulative impacts for low-income and minority environmental justice communities.
The closest environmental justice block group is 0.1 mile from the terminal, and the closest town with an environmental justice community — the town of Cameron — is over two miles away, FERC staff said.
“Cumulative impacts on environmental justice communities related to wetlands, surface water, aquatic resources, socioeconomics, traffic, noise, and air quality would be less than significant,” FERC staff stated in the final EIS. “However, general cumulative impacts related to visual resources would be significant.”
FERC staff described the terminal and its associated structures as “highly visible,” noting that the area would be converted from “open marsh land to industrial land.” The LNG storage tanks would be about 167 feet tall, the EIS said, and the associated flare stacks “would rise to heights of 200 and 300 feet.”
Staff also highlighted measures that Commonwealth has taken to mitigate impacts. For example, the developer had proposed planting native trees as a buffer between the project site and the nearest residence.
It’s not necessarily unusual for FERC staff to conclude that the impacts of a proposed natural gas project would be “disproportionately high and adverse,” said Christi Tezak, a managing director at ClearView Energy Partners LLC.
But staff will often caveat such language by adding that the impacts would be temporary, or that the project developer could mitigate those impacts so that they could be deemed “not significant” for the purposes of the National Environmental Policy Act (NEPA), Tezak said.
Such language regarding environmental justice impacts was absent in this case, she noted.
“The difference I see here is that the project sponsor apparently can’t ‘mitigate’ the visual impacts for the EJ communities. Whether FERC is willing to deny an application solely over visual impacts to an EJ community remains to be seen,” Tezak said in an email.
‘This is what they do’
The EIS comes as FERC Chair Richard Glick has sought to increase the agency’s attention to environmental justice — something some legal experts say has been lacking historically.
Last year, a court ordered the commission to redo its environmental justice analysis for two LNG projects it had approved in 2019 (Energywire, Aug. 4, 2021). Earlier this year, the agency’s first senior counsel for environmental justice and equity, Montina Cole, said that FERC intended to build staff capacity focused on equity and related issues (Energywire, June 2).
With an estimated population of just over 200 people, the town of Cameron is mostly populated with local shrimpers and fishermen, said James Hiatt, southwest Louisiana coordinator for the Louisiana Bucket Brigade, a local environmental group. Some residents are therefore worried about how the proposed LNG terminals and increased shipping traffic in the area would impact their livelihood, he said.
“Some of these shrimpers, they don’t have anywhere else to go. This what they do,” Hiatt said.
Still, Commonwealth LNG has said the project would create new jobs and boost tax revenue in in Cameron and Cameron Parish. The terminal is estimated to create an average of 800 on-site engineering and construction jobs, as well as 65 permanent jobs.
While FERC’s environmental impact statement found that most of the project’s impacts would be significant, the document relies on assumptions “that nothing will go wrong and that things are not as bad as they might seem,” according to Jennifer Danis, a senior attorney at the Niskanen Center.
Because the community surrounding the terminal site is already overburdened, any additional adverse effects should be considered significant for the purposes of NEPA, she said.
“If the commission certifies the project given these findings, it would be hard to understand how many equally damaging facilities would be too many,” Danis said.
MINING:
Our Energy Future Depends on Mining
American Mining Association
POLITICS:
Why Are Environmental Activists Trying to Block Green Energy? The climate justice movement has lost the plot.
Jonathan Chait, Intelligencer, September 10, 2022
One of the conditions Joe Manchin attached for supporting the largest climate-change investment in U.S. history was a separate vote to enact permitting reform. (What is permitting reform? It means speeding up the regulatory process that builders must navigate to approve new projects.)
Opposition to permitting reform has become a rallying cry for many environmental activists. Progressives are pushing a resolution by the Democratic National Committee to oppose permitting reform and holding a rally in Washington, D.C.
“The environmental-justice community is very concerned these permitting rules will make it a lot easier to keep the fossil-fuel projects that are polluting their communities. So they’re pretty torqued,” a Democratic senator told The Hill.
The environmental-justice committee is out of its mind. Without permitting reform, the green-energy transition stands no chance of happening.
Compared to our peer countries, the U.S. pays more to build almost any kind of infrastructure — roads, buildings, trains, whatever. The 1970 National Environmental Policy Act is a major reason why. The law requires environmental-impact statements before approving new projects. Over the years, the requirements have grown more elaborate and courts have ruled that individuals have a right to bring legal action to block any new project on environmental-impact grounds.
Brink Lindsey and Samuel Hammond explain how these requirements have grown far more onerous over time:
In the early days, NEPA’s procedural requirements were modest: An EIS could be as short as 10 pages, and the legislation didn’t provide for a private right of action. Courts soon declared a private right of action, though, and under the pressure of litigation the law’s demands grew ever more onerous: Today the average EIS runs more than 600 pages, plus appendices that typically exceed 1,000 pages. The average EIS now takes 4.5 years to complete; between 2010 and 2017, four such statements were completed after delays of 17 years or more. And remember, no ground can be broken on a project until the EIS has made it through the legal gauntlet — and this includes both federal projects and private projects that require a federal permit. Meanwhile, the far more numerous environmental assessments (the federal government performs more than 12,000 of them a year, compared to 20-something Environmental Impact Statements) have likewise become much lengthier and more time-consuming to complete.
NEPA still commands the support of a large number of environmental groups, and “environmental review” sounds like the kind of process environmentalists should support. But keep in mind that the law was written well before combating climate change became a major environmental priority. And it reflects an antiquated idea of small-c conservative environmentalism designed to preserve the built environment as it exists that makes the rapid transformation to green energy impossible.