40
and that the large water withdrawals could drastically impact aquatic ecosystems and human
communities. Sierra Club also contends that hydraulic fracturing poses a serious risk of
groundwater contamination from the chemicals added to the drilling mud and fracturing fluid
and from naturally occurring chemicals in deeper formations mobilized during the hydraulic
fracturing process. Sierra Club asserts that contamination can occur through several methods,
including where the well casing fails or where the fractures created through drilling intersect an
existing, poorly sealed well. Sierra Club asserts that hydraulic fracturing has resulted in
groundwater contamination in at least five documented instances. According to Sierra Club,
EPA has investigated groundwater contamination likely resulting from hydraulic fracturing in
Pavillion, Wyoming, and Dimock, Pennsylvania, concluding that surface pits previously used for
storage of drilling wastes and produced/flowback waters were a likely source of contamination
for shallower waters, while hydraulic fracturing likely explained deeper contamination.
145
Sierra Club states that natural gas production, particularly hydraulic fracturing, produces
liquid and solid wastes, including drilling mud, drill cuttings, “flowback” (the fracturing fluid
that returns to the surface after the hydraulic fracturing is completed), and produced water (a
mixture of water naturally occurring in the shale formation and lingering fracturing fluid). Sierra
Club argues that these wastes must be managed and disposed. Sierra Club states that drilling
mud, drill cuttings, flowback, and produced water are often stored on site in open pits that can
have harmful air emissions, can leach into shallow groundwater, and can fail and result in
surface discharges. Sierra Club also notes that flowback and produced water must be disposed
offsite, with a common method being underground injection wells. Sierra Club claims that
145
See Sierra Club Mot. at 49-53.
41
underground injection of hydraulic fracturing wastewater appears to have induced earthquakes in
several regions—a phenomenon known as induced seismicity.
146
Sierra Club states that, in addition to the above-described production-related impacts,
Delfin’s export proposal will increase air pollution by increasing the amount of coal used for
domestic electricity production. Citing the 2012 EIA Study, Sierra Club states that exports will
cause natural gas prices to rise, leading to increased electricity generation from coal.
Specifically, Sierra Club maintains that EIA projected that 72 percent of the decrease in natural
gas-fired electricity production due to gas exports will be replaced by coal-fired production,
which, according to Sierra Club, will increase emissions of both traditional air pollutants and
greenhouse gases.
147
Sierra Club urges DOE/FE to take a hard look at the change in domestic
GHG emissions that would result.
148
Additionally, Sierra Club argues that LNG exports will increase greenhouse gas
emissions not only domestically but also internationally. Sierra Club contends that a recent
study by the International Energy Agency predicts that international trade in LNG will lead many
countries to use natural gas in place of renewable energy (instead of displacing fossil fuels), and
to increase their levels of energy consumption.
149
Additionally, Sierra Club claims that the
liquefaction, transportation, and regasification process is energy intensive and increases the
lifecycle GHG emissions of LNG compared to methods of consumption where the natural gas
remains in a gaseous phase. Sierra Club argues that, for these reasons, LNG has little, if any,
advantage over coal, and thus it is unlikely LNG exports would reduce global GHG emissions.
Moreover, even if imported LNG were to displace other fossil fuels, Sierra Club asserts that the
146
See id. at 54-56.
147
See id. at 57.
148
See id. at 58.
149
See id. at 59.
42
resulting reductions will be much less than those needed to stabilize atmospheric GHG emissions
below a “catastrophic level.”
150
Sierra Club contends that DOE/FE must investigate policy
options that would encourage the emissions reductions necessary to avert climate disaster.
151
3.
Alleged Economic Impacts from the Requested Authorization
Addressing economic consequences, Sierra Club broadly contends that LNG exports will
increase domestic natural gas prices which, in turn, “will harm the majority of the American
public by decreasing real wages and reducing employment in energy-intensive industries.”
152
Sierra Club asserts that the both the 2012 EIA and NERA Studies understate the extent to
which prices for natural gas will increase in response to LNG exports.
153
According to Sierra
Club, these Studies suffer from three flaws. First, Sierra Club alleges neither Study considers the
full volume of exports that are proposed. Second, the NERA Study allegedly understates the
likelihood of any particular volume of exports occurring by failing to account for the effect of
sunk costs in export agreements and by overstating the cost of LNG transport. Third, Sierra Club
states that the 2012 EIA and NERA Studies understate the rate at which LNG exports may be
phased in, and as such, they fail to address the potential for price spikes.
154
Sierra Club maintains that DOE/FE must look at the effect “given price increases” will
have on the public generally.
155
Sierra Club argues that exports will cause domestic price
increases for natural gas, resulting in a decline of employment in manufacturing while consumers
allegedly will face higher total natural gas bills despite using less natural gas.
156
150
Sierra Club Mot. at 62.
151
See id.
152
Id. at 63.
153
See id. at 16.
154
See id. at 63-64.
155
Sierra Club Mot. at 66.
156
See id.
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