A US court struck down permits for controversial LNG projects in Texas

A U.S. court just dealt a major blow to a string of giant fossil fuel projects under development in coastal Texas.

Earlier this week, the U.S. Court of Appeals for the D.C. Circuit overturned the Federal Energy Regulatory Commission’s authorizations for two liquefied natural gas (LNG) export terminals at the Port of Brownsville and a related fossil gas pipeline. The court sided with environmentalists and Indigenous leaders in finding that FERC had ​“erroneously declined” to fully assess the projects’ potential impacts on air quality within nearby marginalized communities.

“This decision affirms what South Texas communities have long known and been fighting for: Environmental justice matters, and FERC absolutely must consider these issues when deciding on such massively harmful projects,” said Nathan Matthews, a senior attorney for the Sierra Club, one of the groups suing FERC to halt progress on the LNG infrastructure.

The court’s decision on Tuesday sets the projects’ developers back a few steps, as it requires them to secure new FERC permits, though it doesn’t immediately halt ongoing construction.

If completed as planned, NextDecade’s Rio Grande LNG terminal and Glenfarne Energy Transition’s Texas LNG terminal would bring significant industrial activity to what has been a largely unspoiled coastline near the United States–Mexico border. The southeastern tip of Texas is one of the last places along the state’s Gulf Coast shores to remain free from major oil and gas development. The area is a haven for birds, turtles, and dolphins and encompasses the ancestral lands of the Carrizo/​Comecrudo Tribe of Texas.

“I feel proud to continue to fight for and protect our sacred homelands, our ancestors, and our histories,” Juan Mancias, the tribal chairman, said on Tuesday in a statement.

NextDecade said that it is ​“disappointed in the Court’s decision and disagrees with its conclusions” and that the company is now ​“assessing all of its options.” In an email, a spokesperson for the Texas LNG project said the company is ​“committed to resolving this issue quickly and completely to continue our progress” on the terminal. 

The legal fight in South Texas is playing out amid a much larger national debate over America’s ongoing boom in LNG exports.

LNG is made through an energy-intensive process that involves super-chilling fossil gas to -260 degrees Fahrenheit to liquefy it. In this form, the fuel can be loaded at greater volumes onto big ocean tankers, many of which then head to Europe — where countries are using U.S. fossil gas to replace Russian supplies — and to Asia, where countries are using gas to help grow their economies.

Since February 2016, when the Lower 48 states first began exporting LNG, the amount of U.S. fossil gas shipped overseas has risen from near zero to 88.9 million metric tons in 2023, making the United States the world’s largest LNG exporter last year.

Given the sudden surge in U.S. production, climate activists and some Democratic U.S. lawmakers have sought to pump the brakes on additional development, arguing that new facilities will exacerbate the climate crisis and jeopardize people’s health and safety.

Energy experts say the net climate impact of exporting LNG ultimately depends on whether the fossil fuel is displacing cleaner renewables or dirtier coal in the importing countries, and on the types of measures that gas companies take to prevent methane leaks at every step. Yet scientists are clear that, in the long run, gas production is ​“inconsistent” with the Paris Agreement’s goals for limiting global warming. And LNG facilities themselves can be significant sources of toxic air pollution, including carbon monoxide, nitrogen oxides, and volatile organic compounds.

The Rio Grande LNG export terminal in South Texas is expected to be one of the largest projects of its kind in the country. The terminal is set to span nearly 1,000 acres along the Brownsville Ship Channel, close to where the Rio Grande meets the Gulf of Mexico. At full scale, the facility could produce 27 million metric tons of LNG per year, or nearly a third of all the LNG produced nationwide last year.

Last October, NextDecade began construction on the project’s first and largest phase, which is expected to reach completion by early 2029 and could cost around $18.4 billion to build. The company also plans to install systems that capture and store carbon dioxide emissions produced at the site.

Shale gas for the Rio Grande terminal will arrive from the Permian and Eagle Ford basins via the Rio Bravo Pipeline and the Valley Crossing Pipeline, both of which are owned by Enbridge Inc. The second conduit currently exports gas to Mexico, though Enbridge is looking to expand its carrying capacity and length. The Rio Bravo Pipeline is still going through regulatory proceedings, with construction anticipated to begin next year.

Next door to the Rio Grande terminal, on a 625-acre stretch of black mangrove, Glenfarne is aiming to start work this year on the Texas LNG terminal. The facility, which is also targeted to come online in 2029, would be capable of producing up to 4 million metric tons per year of the liquefied fossil fuel.

FERC, which is an independent federal agency, first approved construction of the LNG export terminals and the Rio Bravo Pipeline in 2019. In response, the Sierra Club and other parties took swift legal action, arguing that neither developers nor the commission properly assessed the projects’ climate and environmental justice impacts. In August 2021, the D.C. Circuit Court sided with opponents, finding FERC’s analyses to be ​“deficient.”

The court then issued a ​“remand order” requiring FERC to reassess those issues, which it did. In April 2023, commissioners reapproved the gas projects, but without issuing a supplemental environmental impact statement for FERC’s environmental justice analysis. That prompted another legal challenge from environmental groups, the Carrizo/​Comecrudo Tribe, and the City of Port Isabel — resulting in Tuesday’s court decision.

Going forward, FERC must now reconsider the environmental justice impacts of all three gas projects, including issuing a new draft supplemental environmental impact statement and holding another public comment period. Only after that can the commission decide whether to approve new project permits, resulting in potentially significant costs and time delays for developers.

NextDecade said it is continuing construction on the Rio Grande terminal’s first phase, which includes three liquefaction plants and related infrastructure, while it continues to assess the potential implications for its next construction phases. The D.C. Circuit Court held that its order won’t take effect until a week after the 45-day deadline for FERC or the developers to seek a rehearing. After that point, NextDecade will lose its authorization to continue construction, the Sierra Club’s Matthews explained.

The court’s ruling hardly marks the end of the LNG export dilemma in South Texas. But opponents of the developments expressed a sense of validation in their decade-long fight to protect the Rio Grande Valley and the people who live there.

“We’ve organized protests, legal actions, and more to oppose Rio Grande LNG and Texas LNG, which would pollute the ship channel waters, the wildlife refuge, and low-income neighborhoods,” Bekah Hinojosa, an organizer with the South Texas Environmental Justice Network in Brownsville, Texas, said in a statement. ​“Thanks to many years of organizing, we’ve achieved significant victories.”