Louisiana's environmental regulators properly issued air pollution permits for a proposed $4 billion Commonwealth LNG export facility in Cameron Parish, according to a ruling from the U.S. 5th Circuit Court of Appeals.
The facility is among a list of 11 liquefied natural gas projects either already built, approved or being proposed for southwest Louisiana, generating strong opposition from environmental groups. Others are also planned for Plaquemines Parish.
A three-judge panel for the 5th Circuit, based in New Orleans, issued the decision on Monday.
The pre-construction permits from the state Department of Environmental Quality in March 2023 govern emissions from various parts of the huge facility. Those include electric generators that power equipment used to turn natural gas into liquefied form, vents and emission collection equipment on storage tanks, and equipment that transfers the liquefied gas to ocean-going vessels for export overseas.
The DEQ permits were challenged in May 2023 by the Sierra Club national environmental group, which argued they would allow the facility to release more than the federally allowed limits of nitrogen oxides, a chemical that is a precursor to the formation of ozone.
The organization has challenged LNG facilities both because of their emissions and their export of liquefied gas around the world, where it also produces carbon dioxide when it is burned. Carbon dioxide is a primary contributor to human-caused climate change.
The Sierra Club argued that DEQ improperly used a less stringent method of determining whether the plant's emissions would violate federal emission limits called "significant impact levels." It says the state should have instead conducted a more comprehensive set of tests to determine whether emissions from the proposed plant would violate the law and did not require the company to use best available technology to reduce emissions. By doing so, DEQ failed to follow its "public trust" duty to to protect, conserve and replenish the state's natural resources, the group alleges.
The federal appeals court ruling by Judges Kurt Engelhardt, appointed by President Donald Trump; Carl Stewart, appointed by President Bill Clinton; and Stuart Duncan, appointed by Trump, and written by Engelhardt, rejected all of the Sierra Club's arguments.
The ruling found that the federal Clean Air Act requires EPA to work in a cooperative fashion with states to assure that industries like the LNG facility meet the law's National Ambient Air Quality Standards governing emissions of six pollutants: carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter and sulfur dioxide.
The state's use of "significant impact levels" followed EPA guidance, and their use had already been upheld in other rulings by the 5th Circuit involving other states.
It also found that DEQ properly dismissed alternative emission-limiting technology proposed by the Sierra Club, giving deference to the agency's conclusion that its alternative "is not technically feasible."
And the court found that Sierra's "public trust" argument also failed because DEQ performed a comprehensive, 29-page analysis into whether the plant's adverse environmental impacts have been minimized or avoided as much as possible.
The Sierra Club said Tuesday it disagrees with the 5th Circuit decision.
"If built, this facility will contribute a significant amount of pollution to Cameron Parish and the Lake Charles area," said staff attorney Tom Gosselin. "DEQ and the company both project violations of the health-based National Ambient Air Quality Standards, which will only exacerbate the pollution burden in southwest Louisiana. We're still evaluating the Fifth Circuit's opinion and our options."
Houston-based Commonwealth welcomed the decision.
"We remain fully committed to developing our LNG export facility in Cameron Parish," said Lyle Hanna, company spokesperson. "While our schedule has been delayed by the U.S. Department of Energy’s pause on permit reviews for pending LNG projects, we currently anticipate a final investment decision in the first half of 2025."
In August 2023, the company announced it had struck a deal with Kimmeridge Energy Management Company for the New York-based private equity firm to take 2 million tons of LNG annually over 20 years, and to finance Commonwealth's terminal construction.
In November, Commonwealth announced an agreement with OnStream CO2 LLC to develop a carbon capture and storage facility on the Commonwealth site to handle carbon emissions from the LNG facility.
If the company's start of construction timeframe holds, the first shipments of LNG overseas could begin in the fourth quarter of 2028.