Republican Texas Sen. Ted Cruz called on Federal Energy Regulatory Commission (FERC) Commissioner Willie Phillips to appeal a federal court’s August decision that vacated approvals for two major liquefied natural gas (LNG) export terminals in Texas in a Wednesday letter. [emphasis, links added]
FERC previously authorized the Rio Grande LNG and Texas LNG export terminal projects, but the U.S. Court of Appeals for the D.C. Circuit vacated those approvals and remanded the issue back to FERC for further consideration, according to UtilityDive.
In his letter to Phillips (Download as PDF), Cruz urged the FERC regulator to pursue an appeal of the ruling and a stay in the interim while the appellate process plays out, citing the unprecedented nature of the court’s decision, the broader chilling effect that the court’s move could create for investment, and possible negative ramifications for national security.
“The decision sets a chilling precedent that will harm the development of infrastructure for projects related to all forms of energy, directly undermining American energy security and therefore national security,” Cruz wrote in his letter.
“If the permits are not reauthorized, over 7,000 high-paying jobs will disappear, and roughly $24 billion in investments in the Rio Grande Valley will be lost.”
“There is no precedent for this decision,” Cruz continued. “Charles McConnell, the former Assistant Secretary of Energy at the Department of Energy in President Barack Obama’s Administration says ‘If allowed to stand, the precedent from this ruling would be absolutely draconian to investment progress.’ ”
Specifically, the court ruled that FERC was mistaken in not issuing environmental reviews focused on how the terminals would impact so-called “environmental justice” communities and failing to adequately assess a proposed carbon capture and sequestration (CCS) system at one of the facilities, according to UtilityDive.
As a result, timelines for both terminals have likely been disrupted.
Cruz also stated that the court’s decision also threatens other development, such as a huge $400 million project to deepen the Brownsville shipping channel, $20 billion worth of other investments, and up to 31 million tons of annual LNG exports to other countries.
Moreover, developers looking to build major infrastructure projects may start having second thoughts if crucial approvals can be vacated because regulators — and not the developers themselves — make procedural mistakes that courts can then seize on.
LNG has become a major issue in domestic politics, particularly since the Biden-Harris administration unilaterally froze new approvals for export terminals proposing to ship to countries with which the U.S. does not have free trade agreements in January.
Critics of that policy have similarly highlighted how the moratorium can chill investment, and others have also pointed out that LNG is key for America’s geopolitical interests because it allows European allies an option to replace Russian gas as the Ukraine war drags on.
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