Fifth Circuit Yanks Permit For $13 Billion LNG Project In Port Arthur

On November 14, the Fifth Circuit Court of Appeals overturned a Texas permit issued to a huge proposed liquefied natural gas (LNG) plant, Sempra Energy’s $13 billion Port Arthur LNG project in Jefferson County.

The court was responding to a civil suit brought by the Port Arthur Community Action Network, which sued the Texas Commission on Environmental Quality, the permit-granting authority. The court agreed with the plaintiffs’ contention that the TCEQ treated the Sempra facility—specifically, its allowable emissions — differently than a similar proposed project, Rio Grande LLC. 

“When a Texas state agency departs from its own administrative policy, or applies a policy inconsistently, Texas law requires it to adequately explain its reasons for doing so,” the court ruled. “In this case, the Texas Commission on Environmental Quality declined to impose certain emissions limits on a new natural gas facility that it had recently imposed on another such facility. In doing so, it contravened its policy of adhering to previously imposed emissions limits, but it did not adequately explain why. It therefore acted arbitrarily and capriciously under Texas law.” 

The court said the TCEQ “is not forever bound to the emissions limits that it set for Rio Grande LNG for all subsequent permits,” but that it must at least explain its rationale if and when it departs from those limits—which it failed to do, according to the court.

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At this writing, the TCEQ had not released a statement. Sempra Energy, based in California, said it is reviewing the appellate court’s decision and “any potential impacts it may have to the Port Arthur LNG project.”

“We are continuing construction on the project under existing permits and remain committed to working with the Texas Commission on Environmental Quality and other stakeholders and are evaluating our next steps,” Sempra added.

The court ruling does not necessarily stop the project, but it does require the company to reapply for a TCEQ permit under the emissions standards imposed on the Rio Grande LNG project in south Texas.

The Port Arthur LNG facility is billed as being able to produce up to 13.5 million metric tons per year with the first two of four planned natural gas liquefication trains.

Sempra had just announced in September that it had received  approval from the Federal Energy Regulatory Commission for its Phase 2 expansion project. “The [FERC] permit is a major regulatory milestone for a proposed Phase 2 project, including the addition of two liquefaction trains (trains 3 and 4) capable of producing up to 13 million tons per annum of liquefied natural gas (LNG),” the company said.

The case is Port Arthur Community Action Network v. Texas Commission on Environmental Quality.