DOE Denies Rehearing of Order Authorizing Dominion Cove Point LNG Exports

The U.S. Department of Energy (DOE) has issued an order denying Sierra Club’s request for rehearing of DOE’s order, which authorizes Dominion Cove Point LNG (DCP) to export 281 Bcf/year of LNG over a 20-year period from DCP’s proposed LNG export terminal at Lusby, Md. to nations without a Free Trade Agreement with the United States.  On rehearing, Sierra Club asserted that DOE’s environmental review of DCP’s export proposal failed to comply with the National Environmental Policy Act because FERC’s Environmental Assessment of the project, which DOE adopted, did not take a “hard look” at the indirect and cumulative impacts of LNG exports, such as the environmental effects of the proposed export terminal on the adjacent neighborhood and induced natural gas production.  Sierra Club also argued that DOE “should have assessed the cumulative impacts of drilling induced by all other approved and pending [non-FTA] export projects as part of its cumulative impacts analysis.”  DOE rejected Sierra Club’s arguments stating, among other things, that because “the footprint of [DCP’s] Liquefaction Project is entirely within the existing Cove Point Terminal—where much of the land has been previously disturbed by multiple prior projects—the environmental impacts are small in number and well-defined.”  In addition, DOE stated that “induced natural gas production attributable to DCP’s Project is not ‘reasonably foreseeable’ and we therefore reject this argument.”