Critics of LNG Plan Say Army Corps Failed to Assess Impacts Before Issuing Permit

Environmental group alleges that planned South Jersey export terminal would have a range of impacts, including on wildlife and water
Ship for transporting liquified natural gas (LNG)Credit: energy.gov
Delaware Riverkeeper Network filed a complaint in federal court claiming an environmental impact study is needed for a proposed liquefied natural gas export terminal in Gibbstown.

Plans to build New Jersey’s first liquefied natural gas export terminal came under renewed attack as opponents accused the U.S. Army Corps of Engineers of failing to conduct a full study of the project’s environmental impacts before issuing a permit.

The environmental group Delaware Riverkeeper Network (DRN) filed a complaint in federal court in New Jersey last week, claiming that the Corps, one of several regulators that must sign off on the project, had violated the National Environmental Policy Act (NEPA) by not doing an environmental impact study (EIS) on the project on the Delaware River at Gibbstown in Gloucester County.

Therefore, the project has not been properly permitted, and should not proceed, said DRN, one of many environmental groups that oppose construction of the terminal.

It said the Corps had been “arbitrary and capricious” by failing to do the assessment, as required by NEPA if there are “major federal actions,” such as issuance of the permit, that affect the quality of the human environment.

And it said the Corps didn’t give enough weight to the project’s impacts on climate and public safety when it did a public interest review.

DRN said it would ask the court to block the project temporarily or permanently until the Corps complies with all relevant laws and regulations.

A spokesman for the Corps’ Philadelphia office said the agency never comments on matters that are under litigation.

Danger to public safety

Critics say the terminal would endanger public safety by shipping highly explosive liquefied natural gas (LNG) through populous parts of Pennsylvania and New Jersey en route from a new liquefaction plant at Wyalusing in northeast Pennsylvania. The terminal could be served by 360 trucks a day operating around the clock, and/or by rail, following the nation’s first LNG-by-rail permit the federal government issued last December.

The proposed terminal would be an expansion of a project called the Gibbstown Logistics Center, which is already under construction.

New Fortress Energy, the Delaware River Partners parent that proposes to build the terminal, did not respond to requests for comment on the DRN complaint. Last December, it called the rail permit a “significant milestone” that would allow domestically produced LNG to be moved safely and efficiently.

Sharp decline in global prices

The company also did not respond to a request for comment on a recent sharp decline in global LNG prices that has forced the cancellation or delay of several other LNG export or production projects in Texas, Louisiana, Australia and elsewhere, according to a new report from the Institute for Energy Economics and Financial Analysis, which promotes the transition to sustainable energy.

Prices have been low for several years because of over-supply, and have dropped further in recent weeks as the COVID-19 pandemic has dramatically cut demand. The price of U.S. LNG exports was $5.26 per thousand cubic feet in January, less than half of its level in January 2016, according to data from the U.S. Energy Information Administration.

Whether DRN can force the Corps to do an environmental impact statement depends on whether it can prove in court that the agency violated NEPA, said John Dernbach, an environmental law professor at Widener University Commonwealth Law School in Harrisburg, Pennsylvania.

“Putting in an LNG terminal is a big deal, it’s not like building a car wash,” said Dernbach. “There are a lot of things you need to do, and it looks from the complaint that a lot of those things weren’t done. The fact that there will be a new LNG terminal there makes it highly likely to be a significant project that would require a significant environmental analysis under NEPA.”

The complaint describes a project that would have significant environmental impact including the volume of gas that would be loaded on to ocean-going ships, and a round-the-clock flow of trucks and/or trains carrying the super-cooled gas, Dernbach said.

“If they can prove all of that, the project is going to need a lot of work before it can go ahead,” he said.

An uphill battle?

But another attorney who spoke on condition of anonymity said DRN will have a hard time persuading the court to rule that the Corps violated NEPA, given that courts often defer to the technical expertise of government agencies. In this case, that expertise would cover the 22 kinds of environmental impacts that DRN claims the project would have.

In addition to increased truck and rail traffic along the 175-mile route from Pennsylvania, the alleged impacts include effects on wildlife, dredging the river, and development of a contaminated site formerly occupied by a DuPont explosives factory, according to DRN’s 34-page complaint.

Kacy Manahan, an attorney for DRN, said there is evidence that the Corps did in fact perform an Environmental Assessment, a shorter version of an EIS, before issuing its permit for construction in February. But she said the agency is still required to do the full study to comply with NEPA.

“Approval of the Dock 2 project is a major federal action, and under NEPA, an EIS is required,” she said.

DRN leader Maya van Rossum denied a suggestion that the NEPA complaint, if successful, would just delay, not prevent, the Gibbstown project.

“If we win, we will get facts, information, and scientific review that could change the minds of decisionmakers, maybe not the federal agencies, but the state, local or DRBC decisionmakers that also have to approve the project for it to be built,” she said, referring to the Delaware River Basin Commission.

Beginning on May 11, the DRBC will hold an “adjudicatory hearing,” a trial-like event that will review its approval last year of the LNG plan. DRN requested the hearing on the grounds that the project would “substantially affect” the water resources of the basin. The event was previously scheduled to begin on April 15 with in-person appearances but will now be held virtually because of the COVID-19 pandemic.