147
federal actions of cooperating agencies, including but not limited to FERC for the certification of
the components of the Delfin Onshore Project.
336
Based
on this record, we find that MARAD’s
environmental review covered all reasonably foreseeable environmental impacts of the proposed
Delfin Liquefaction Facility,
337
and that NEPA does not require the review to include induced
upstream natural gas production.
Fundamental uncertainties constrain our ability to foresee and analyze with any
particularity the incremental natural gas production that may be induced by permitting exports of
LNG to non-FTA countries—whether from unconventional shale gas formations or otherwise.
For this reason, and because DOE/FE had received comments regarding the potential
environmental impacts associated with unconventional production, DOE/FE produced the
Addendum and made it available for public comment. The Addendum takes a broad look at
unconventional natural gas production in the United States,
with chapters covering water
resources (including water quantity and quality), air quality, GHG emissions, induced seismicity,
and land use.
The Addendum addresses unconventional natural gas production in the nation as a whole.
It does not attempt to identify or characterize the incremental environmental impacts that would
result from LNG exports to non-FTA nations. Such impacts are not reasonably foreseeable and
cannot be analyzed with any particularity. To begin, there is uncertainty as to
the aggregate
quantity of natural gas that ultimately may be exported to non-FTA countries. Receiving a non-
FTA authorization from DOE/FE does not guarantee that a particular facility would be financed
and built; nor does it guarantee that, if built, market conditions would continue to favor export
336
See id.
337
Under CEQ’s regulations, “indirect effects” of a proposed action are “caused by the action and are
later in time or
farther removed in distance, but are still reasonably foreseeable.” 40 C.F.R. § 1508.8(b).
148
once the facility is operational. To illustrate the point, of the more than 40 applications to build
new LNG import facilities that were submitted to federal agencies between 2000 and 2010, only
eight new facilities were built and those facilities have seen declining use in the past decade.
338
There is also fundamental uncertainty as to where any additional production would occur
and in what quantity. As the Addendum illustrates, nearly all of the environmental issues
presented by unconventional natural gas production are local in nature, affecting local water
resources, local air quality, and local land use
patterns, all under the auspices of state and local
regulatory authority. As DOE explained in
Sabine Pass,
Order No. 2961-A, without knowing
where, in what quantity, and under what circumstances additional gas production will arise, the
environmental impacts resulting from production activity induced by LNG exports to non-FTA
countries are not “reasonably foreseeable” within the meaning of the CEQ’s NEPA
regulations.
339
3.
Cumulative Environmental Impacts
Sierra Club has asserted in this proceeding that DOE/FE’s environmental review must
consider the cumulative environmental impacts from all proposed and
previously approved
export authorizations and that a programmatic EIS is legally required for these purposes. We
find that the environmental review conducted by MARAD took into account all reasonably
foreseeable cumulative environmental impacts relating to the exports of LNG proposed in this
proceeding.
340
In our view, Sierra Club is seeking a programmatic EIS where no broad federal
338
See Freeport LNG Expansion L.P.,
et al.
, LLC, DOE/FE Order No. 3357, FE Docket No. 11-161-LNG, Order
Conditionally Granting Long-Term Multi-Contract Authorization to Export Liquefied Natural
Gas by Vessel from
the Freeport LNG Terminal on Quintana Island, Texas to Non-Free Trade Agreement Nations, at 100-01 n.161
(Nov. 15, 2013) (FLEX II Conditional Order).
339
See Sabine Pass Liquefaction, LLC, DOE/FE Order No. 2961-A, FE Docket No. 10-111-LNG, Final Opinion and
Order Granting Long-Term Authorization to Export Liquefied Natural Gas From Sabine Pass LNG Terminal to
Non-Free Trade Agreement Nations, at 11 (Aug. 7, 2012) (quoting 40 C.F.R. § 1508.7).
340
See,
e.g., Final EIS 6-1 to 6-24 (reviewing cumulative impacts).
149
action such as the adoption of a new agency program had been proposed.
341
Thus, the EIS
properly fulfilled its purpose of disclosing the environmental impacts of the Delfin Liquefaction
Facility while also setting forth measures that would mitigate or minimize potential impacts.
We, therefore, agree with MARAD’s reasoning and adopt its analysis concerning cumulative
environmental impacts.
4.
Environmental Impacts Associated with Induced Production of Natural
Gas
The current rapid development of natural gas resources in the
United States likely will
continue, with or without the export of natural gas to non-FTA nations.
342
Nevertheless, a
decision by DOE/FE to authorize exports to non-FTA nations could accelerate that development
by some increment. For this reason, DOE/FE prepared and received public comment on the
Addendum and made the Addendum and the comments part of the record in this proceeding. As
discussed above, the Addendum reviewed the academic and technical literature covering the
most significant issues associated with
unconventional gas production, including impacts to
water resources, air quality, greenhouse gas emissions, induced seismicity, and land use.
The Addendum shows that there are potential environmental issues associated with
unconventional natural gas production that need to be carefully managed, especially with respect
to emissions of VOCs and methane, and the potential for groundwater contamination. These
environmental concerns do
not lead us to conclude, however, that exports of natural gas to non-
FTA nations should be prohibited. Rather, we believe the public interest is better served by
addressing these environmental concerns directly—through federal, state, or local regulation, or
through self-imposed industry guidelines where appropriate—rather than by prohibiting exports
341
40 C.F.R. § 1502.4(b).
342
Addendum at 2.