HomeNewsU.S. appeals court likely to reject challenge to Alaska LNG exports

U.S. appeals court likely to reject challenge to Alaska LNG exports

10/22/2024

A U.S. appeals court on Monday appeared likely to reject a challenge by environmental groups to the Biden administration's decision to approve exports from a planned $39-B liquefied natural gas project (LNG) in Alaska.

Two members of a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit posed skeptical questions to a lawyer for the environmental groups as she argued that the U.S. Department of Energy (DOE) inadequately weighed the risks to the climate when it authorized exports last year.

U.S. Circuit Judge Justin Walker, a Trump appointee, said that while the climate harms may be uncertain, "it seems like there's still going to be significant economic benefits, whether it's a large effect or small effect.

"It seems, especially with the Natural Gas Act's presumption in favor of gas, that if there are going to be economic benefits and if it's merely speculative whether there will be environmental harms, that DOE in that situation at least may authorize the export," Walker said.

The project, being developed by the Alaska Gas Development Corp, includes a liquefaction facility on the Kenai Peninsula in southern Alaska and a proposed 807-mi (1,300-km) pipeline to move gas stranded in northern Alaska across the state.

Initially in 2020 toward the tail end of Republican former President Donald Trump's administration the Energy Department had granted approval for LNG exports to countries with which the United States did not have a free trade agreement.

However, the Energy Department under Democratic President Joe Biden, at the behest of the environmental group Sierra Club, agreed to conduct new environmental review studies but ultimately reaffirmed the approval of exports in April 2023.

The Energy Department had concluded that exports would likely create jobs in the fields of natural gas development, production and transportation, help lower natural gas prices in the state and boost the national gross domestic product.

"DOE made a considered judgment," said U.S. Department of Justice attorney John Smeltzer.

But U.S. Circuit Judge Brad Garcia, a Biden appointee, said it appeared that the department "really didn't have in their head anything about the magnitude of the benefits."

Moneen Nasmith, a lawyer at Earthjustice arguing on behalf of the Sierra Club and the Center for Biological Diversity, said the department in approving the project overstated the uncertainty of its impact on climate change while ignoring that its claimed economic benefits were themselves speculative.

"What we have to do to address the calamity that is climate change is to stop emitting carbon dioxide and methane," she said. "This project would be responsible for millions of tons of carbon dioxide as well as methane leakage."

But Senior U.S. Circuit Judge A. Raymond Randolph, an appointee of Republican former President Ronald Reagan, told her it seemed "absolutely impossible" to him that allowing the export of gas extracted from a single project in Alaska's Prudhoe Bay would on its own have the "slightest wrinkle of an effect on the global climate."

Howard Nelson, a lawyer for the Alaska Gas Development Corp at Greenberg Traurig, warned that a ruling vacating the Energy Department's approval would cause investors to not risk their capital backing the project.

"If this authorization were to be vacated, that would be an extreme obstacle to this project," he said.

The case is Sierra Club v U.S. Department of Energy, U.S. Court of Appeals for the District of Columbia Circuit, No. 20-1503.

 

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