Recent DC Circuit Rulings Place Future U.S. LNG Growth In Doubt

The year 2024 has been a tough one for America’s liquefied natural gas (LNG) export industry, especially when it comes to the ability of developers to have any degree of certainty around its future growth prospects.

The first stumbling block to progress came in January, when President Joe Biden invoked a “pause” in permitting processes for proposed new LNG export facilities pending a review and updating of “the underlying analyses for authorizations” to be conducted by the Department of Energy. Energy Secretary Jennifer Granholm told attendees at the CERAWeek conference in Houston in March that the pause would be “well in the rearview mirror” when they reconvene in 2025, but her remarks were poorly received by businessmen and women concerned about the investment-dampening impacts of such an unprecedented intercession into an entire U.S. industry sector.

Another event that could dampen enthusiasm for committing to multi-billion-dollar investments into what has been a rapidly expanding sector came in August in the form of a ruling by the DC Circuit Court of Appeals to vacate the FERC permit issued more than a year ago for NextDecade’s Rio Grande LNG project at the Port of Brownsville, Texas. This ruling is the latest in a series of decisions by the DC Circuit in which it agrees with arguments by the Sierra Club and other plaintiffs that it should apply policy directives from the White House Council on Environmental Quality (CEQ) when considering what must be included in environmental reviews conducted under the National Environmental Policy Act (NEPA). Two similarly reasoned prior decisions involved an LNG export facility being developed by Commonwealth LNG and a pipeline project under development by Williams Company.