[Federal Register Volume 79, Number 224 (Thursday, November 20, 2014)]
[Notices]
[Pages 69101-69104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-27486]


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DEPARTMENT OF ENERGY


Record of Decision and Floodplain Statement of Findings for the 
Freeport LNG Expansion, L.P. Export Application

AGENCY: Office of Fossil Energy, Department of Energy.

ACTION: Record of Decision.

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SUMMARY: The U.S. Department of Energy (DOE) announces its decision in 
FE Docket Nos. 10-161-LNG and 11-161-LNG to issue DOE/FE Order Nos. 
3282-C and 3357-B, granting Freeport LNG Expansion L.P., FLNG 
Liquefaction, LLC, FLNG Liquefaction 2, LLC, and FLNG Liquefaction 3, 
LLC (collectively, FLEX) final long-term multi-contract authority to 
export domestically produced liquefied natural gas (LNG) by vessel to 
nations with which the United States has not entered into a free trade 
agreement providing for national treatment for trade in natural gas 
(non-FTA countries). Order Nos. 3282-C and 3357-B are issued under 
section 3 of the Natural Gas Act (NGA). The proposed exports will 
originate from the existing Freeport Terminal, located on Quintana 
Island, southeast of the City of Freeport in Brazoria County, Texas, 
from liquefaction and related facilities to be constructed. DOE 
participated as a cooperating agency with the Federal Energy Regulatory 
Commission (FERC) in preparing an environmental impact statement (EIS) 
analyzing the potential environmental impacts of the proposed 
Liquefaction Project that, if constructed, will be used to support the 
export authorization sought from DOE's Office of Fossil Energy (DOE/
FE).

ADDRESSES: The EIS and this Record of Decision (ROD) are available on 
DOE's National Environmental Policy Act (NEPA) Web site at http://energy.gov/nepa/nepa-documents. Order Nos. 3282-C and 3357-B are 
available on DOE/FE's Web site at http://energy.gov/fe/downloads/listing-doefe-authorizations-issued-2014. For additional information 
about the dockets in these proceedings, contact Larine Moore, U.S. 
Department of Energy, Office of Natural Gas Regulatory Activities, 
Office of Fossil Energy, Room 3E-042, 1000 Independence Avenue SW., 
Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: To obtain additional information about 
the project, the EIS, or the ROD, contact Mr. John Anderson, U.S. 
Department of Energy, Office of Natural Gas Regulatory Activities, 
Office of Fossil Energy, Room 3E-042, 1000 Independence Avenue SW., 
Washington, DC 20585, (202) 586-5600; or Mr. Edward LeDuc, U.S. 
Department of Energy, Office of the Assistant General Counsel for 
Environment, 1000 Independence Avenue SW., Washington, DC 20585, (202) 
586-4007.

SUPPLEMENTARY INFORMATION: DOE prepared this ROD and Floodplain 
Statement of Findings pursuant to the National Environmental Policy Act 
of 1969 (42 United States Code [U.S.C.] 4321, et seq.), and in 
compliance with the Council on Environmental Quality (CEQ) implementing 
regulations for NEPA (40 Code of Federal Regulations [CFR] parts 1500 
through 1508), DOE's implementing procedures for NEPA (10 CFR Part 
1021), and DOE's ``Compliance with Floodplain and Wetland Environmental 
Review Requirements'' (10 CFR part 1022).

Background

    On May 17, 2013, DOE/FE issued Order No. 3282 \1\ to Freeport LNG 
Expansion L.P. and FLNG Liquefaction, LLC, pursuant to section 3(a) of 
the NGA.\2\ DOE/FE subsequently amended Order No. 3282 to add FLNG 
Liquefaction 2, LLC and FLNG Liquefaction 3, LLC as applicants and 
authorizations holders, together with Freeport LNG Expansion L.P. and 
FLNG Liquefaction, LLC (collectively, FLEX), and clarified the order in 
other respects.\3\ Order No. 3282, as amended,

[[Page 69102]]

conditionally granted FLEX's Application \4\ in FE Docket No. 10-161-
LNG for long-term, multi-contract authority to export domestically 
produced LNG by vessel to non-FTA countries. DOE/FE conditionally 
authorized FLEX to export LNG in a volume equivalent to 511 billion 
cubic feet per year (Bcf/yr) of natural gas (1.4 Bcf per day (Bcf/d)), 
or approximately 9 million metric tons per annum (mtpa) of LNG, for a 
term of 20 years.
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    \1\ Freeport LNG Expansion L.P. and FLNG Liquefaction, LLC, DOE/
FE Order No. 3282, FE Docket No. 10-161-LNG, Order Conditionally 
Granting Long-Term Multi-Contract Authorization to Export Liquefied 
Natural Gas by Vessel from the Freeport LNG Terminal on Quintana 
Island, Texas to Non-Free Trade Agreement Nations (May 17, 2013).
    \2\ 15 U.S.C. 717b(a). This authority is delegated to the 
Assistant Secretary for Fossil Energy pursuant to Redelegation Order 
No. 00-002.04F (July 11, 2013).
    \3\ On February 7, 2014, DOE/FE issued Order No. 3282-A, which 
added FLNG Liquefaction 2, LLC and FLNG Liquefaction 3, LLC as 
applicants and authorization holders. On June 6, 2014, DOE/FE issued 
Order No. 3282-B, which further amended Order No. 3282 to clarify 
certain ordering paragraphs.
    \4\ Application of Freeport LNG Expansion L.P., et al., for 
Long-Term Authorization to Export Liquefied Natural Gas to Non-Free 
Trade Agreement Countries, FE Docket No. 10-161-LNG (Dec. 17, 2010).
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    On November 15, 2013, DOE/FE granted a second non-FTA conditional 
authorization to FLEX in DOE/FE Order No. 3357.\5\ Order No. 3357, as 
subsequently amended in Order No. 3357-A,\6\ conditionally authorized 
FLEX to export LNG in a volume equivalent to 146 Bcf/yr of natural gas 
(0.4 Bcf/d) for a 20-year term. Together with the 1.4 Bcf/d 
conditionally authorized in the first non-FTA order, FLEX's total 
combined non-FTA export volume of 1.8 Bcf/d of natural gas (657 Bcf/yr) 
mirrors the known liquefaction capacity of the Liquefaction Project. 
All of FLEX's proposed exports will originate from the existing 
Freeport Terminal, located on Quintana Island, southeast of the City of 
Freeport in Brazoria County, Texas, and the liquefaction and related 
facilities to be constructed by FLEX, as described below.
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    \5\ Freeport LNG Expansion L.P. et al., DOE/FE Order No. 3357, 
FE Docket No. 11-161-LNG, Order Conditionally Granting Long-Term 
Multi-Contract Authorization to Export Liquefied Natural Gas by 
Vessel from the Freeport LNG Terminal on Quintana Island, Texas to 
Non-Free Trade Agreement Nations (Nov. 15, 2013).
    \6\ On June 6, 2014, DOE/FE issued Order No. 3357-A, which 
amended Order No. 3357 to clarify the terms of that Order's 
conditional authorization.
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    In June of 2004, the Federal Energy Regulatory Commission (FERC) 
issued an order authorizing Freeport LNG Development, L.P. to site, 
construct, and operate what is now known as Phase I of the Freeport 
Terminal. In September of 2006 FERC issued an order authorizing the 
Phase II expansion of the Freeport LNG Terminal, which included an 
expansion of the Freeport Terminal's send-out capacity. In December of 
2011, in FERC Docket No. CP12-29-000, FLEX filed with FERC an 
application requesting authorization to expand and modify its 
previously authorized import facilities to facilitate the import and 
export of LNG at the Freeport Terminal (the Phase II Modification 
Project). In August 2012, in FERC Docket No. CP12-509-000, FLEX filed 
an application with FERC to site, construct, and operate the 
Liquefaction Project at the Freeport Terminal under NGA section 3. FERC 
reviewed FLEX's application for the Liquefaction Project in FERC Docket 
No. CP12-509-000 in conjunction with FLEX's application for approval of 
the Phase II Modification Project in FERC Docket No. CP12-29-000.
    At the time that DOE/FE issued the above-referenced non-FTA 
conditional authorizations to FLEX, the matters in FERC Docket Nos. 
CP12-29-000 and CP12-509-000 were still pending. Accordingly, the non-
FTA conditional authorizations addressed the record evidence in their 
respective dockets and entered findings on all non-environmental issues 
considered under NGA section 3(a), including the economic impacts, 
international impacts, and security of gas supply associated with 
FLEX's proposed exports. Because DOE/FE must also consider 
environmental issues, DOE/FE conditioned its authorizations on the 
satisfactory completion of FLEX's environmental review process under 
NEPA, and on DOE/FE's issuance of a finding of no significant impact or 
a record of decision (ROD).\7\
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    \7\ See DOE/FE Order No. 3282 at 123 (Ordering Para. F).
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Project Description

    The proposed facilities will be integrated into the existing 
Freeport Terminal, which presently consists of a marine berth, two 
160,000 m\3\ full containment LNG storage tanks, LNG vaporization 
systems, associated utilities, and a 9.6-mile pipeline and meter 
station. The Phase II Modification Project calls for improvements to 
facilities previously authorized by FERC, including the re-orientation 
and modification of the Phase II marine berthing dock, modifying the 
LNG transfer pipelines between the second marine dock and LNG storage 
tanks (one of which is yet to be constructed but was approved with the 
authorization for the Phase II expansion), and the improvement of the 
current access road system, all contained within the previously 
authorized operational area of the Freeport Terminal.
    In addition, the Liquefaction Project consists of multiple 
components, including a Liquefaction Plant at and adjacent to the 
existing Quintana Island terminal and facilities located beyond 
Quintana Island. The Liquefaction Plant would consist of three propane 
pre-cooled mixed refrigerant liquefaction trains, each capable of 
producing a nominal 4.4 million metric tons per annum (mtpa) of LNG 
(13.2 mtpa total) for export, which equates to a total liquefaction 
capacity of approximately 1.8 Bcf/d of natural gas.
    In support of the Liquefaction Plant, FLEX proposes to construct a 
natural gas Pretreatment Plant located about 2.5 miles north of the 
existing Quintana Island terminal. The Pretreatment Plant would process 
the gas for liquefaction. In addition, FLEX proposed to construct 
several interconnecting pipelines and utility lines including a 5.0-
mile-long, 12-inch diameter boil-off gas (BOG) pipeline from the 
terminal to the Pretreatment Plant (referred together as the Pipeline/
Utility LineSystem). The Liquefaction Plant, the Pretreatment Plant, 
and the Pipeline/Utility Line System, together with the associated 
appurtenant structures, are collectively referred to as the 
Liquefaction Project.

The EIS Process

    In accordance with NEPA, FERC issued a draft Environmental Impact 
Statement (EIS) for the proposed Liquefaction Project and Phase II 
Modification Project on March 14, 2014. (79 FR 15,989). The draft EIS 
was mailed to stakeholders, including landowners, the cooperating 
agencies, and those who previously made comments during the NEPA 
scoping process. Issues raised by commenters included concerns 
regarding: air pollution (including air toxics, greenhouse gases, 
deposition impacts; and compliance with the National Ambient Air 
Quality Standards), safety and lack of an emergency response plan, 
construction traffic, noise and dust, lack of housing for construction 
workers, visual impacts, impacts on property values, water use and 
Freeport LNG's source of water, land use impacts, ability to safely 
build the facility on dredge spoils, impacts on the historic Town of 
Quintana, expanding the scope of the cumulative impact analysis and 
alternatives analysis, recreational impacts, noxious odors, and the 
positive impacts from job creation.
    The final EIS, published on June 20, 2014 (79 FR 35,345), 
recommended that FERC approve FLEX's proposed Liquefaction Project and 
Phase II Modification Project subject to 83 environmental conditions. 
On July 30, 2014, FERC issued its Order granting FLEX's requested 
authorization to modify previously authorized LNG facilities to 
facilitate the import and export of LNG at FLEX's Quintana Island 
terminal and granted authorization to site, construct, and operate the 
proposed facilities, subject

[[Page 69103]]

to the 83 environmental conditions contained in Appendix A of that 
order.\8\
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    \8\ Freeport LNG Development, L.P., et al., Order Granting 
Authorization Under Section 3 of the Natural Gas Act, 148 FERC ] 
61,076 (July 30, 2014) [FERC Order].
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    In accordance with 40 CFR 1506.3, after an independent review of 
FERC's final EIS, DOE adopted the EIS on October 3, 2014 (DOE/EIS-
0487), and the U.S. Environmental Protection Agency published a notice 
of that adoption in the Federal Register on October 10, 2014. (79 FR 
61304).

Addendum to Environmental Review Documents Concerning Exports of 
Natural Gas From the United States (Addendum)

    On June 4, 2014, DOE/FE published the Draft Addendum for public 
comment (79 FR 32258). Although not required by NEPA, DOE/FE prepared 
the Addendum in an effort to be responsive to the public and to provide 
the best information available on a subject that had been raised by 
commenters. The Addendum is a review of existing literature and was 
intended to provide information only on the resource areas potentially 
impacted by unconventional gas production.
    The 45-day comment period on the Draft Addendum closed on July 21, 
2014. DOE/FE received 40,745 comments in 18 separate submissions, and 
considered those comments in issuing the Addendum on August 15, 2014. 
DOE provided a summary of the comments received and responses to 
substantive comments in Appendix B of the Addendum. DOE/FE has 
incorporated the Draft Addendum, comments, and final Addendum into the 
record in its FLEX proceeding.

Alternatives

    The EIS conducted an alternatives analysis for the Liquefaction 
Project and found no other practicable alternative that would result in 
less environmental impact that would still address the purpose and need 
of the Projects. Alternatives considered included the No Action 
Alternative, system alternatives, and site alternatives. With respect 
to the No Action Alternative, the EIS concluded that this alternative 
is not viable as FLEX would not be able to provide U.S. natural gas 
producers with new access to global gas suppliers and meet contractual 
obligations.
    For the Phase II Modification Project, the EIS determined that the 
location, design, and purpose is wholly dependent on the existing plant 
facilities and operations at the Quintana Island terminal; therefore, 
other geographically separate sites beyond the terminal were not 
evaluated and no system alternatives exist that could achieve the 
terminal's operational flexibility and capabilities
    With respect to system alternatives for the Liquefaction Project, 
the EIS analyzed other proposed LNG export facilities on the West 
Coast, Gulf Coast, and East Coast of the United States and whether 
these could be considered system alternatives. In all cases the EIS 
found that these alternatives would not address the Liquefaction 
Project's purpose and would not offer any significant environmental 
advantage.
    The EIS also considered the possibility of expanding the size of 
another proposed LNG export terminal to address FLEX's desired export 
capacity. However, this alternative would involve further impacts such 
as: construction of additional liquefaction infrastructure plus the 
potential need for expanded docking facilities. Hence, the 
environmental impacts would not be significantly different than those 
that would occur as a result of the Liquefaction Project.
    Additionally, the EIS evaluated site alternatives for the 
components of the Liquefaction Project, but did not find any viable 
alternatives. Siting of the Liquefaction Plant was dictated by the need 
to be close to the existing offloading areas, LNG storage tanks, 
docking area, and other existing LNG infrastructure at the Quintana 
Island terminal. Moreover, the proposed siting makes maximum use of the 
available areas within the existing Quintana Island terminal.
    The EIS evaluated the feasibility of lowering the pad elevation of 
the Liquefaction Plant to determine whether this would lessen impacts 
on visibility, noise, safety, stormwater, and site engineering. 
However, the EIS determined that this would not provide substantial 
improvements in visibility and noise attenuation, and would result in 
significant geological safety, engineering, traffic and soil disposal 
issues. With respect to the siting of the Pretreatment Plant, the EIS 
assessed ten alternative sites, all of which were deemed unsuitable due 
to site constraints and environmental impacts, except for one site. 
However, based on comments from residents regarding the lack of a 
suitable evacuation route in case of emergency at the alternative site, 
and concerns about noise, air emissions, water discharges, materials 
storage, and flood protection, the EIS concludes that the proposed site 
is the preferred site.
    With respect to siting of the Pipeline/Utility Line System, the 
main alternative siting criteria were the functional interdependency 
and geographic locations of the proposed process facilities 
(Liquefaction Plant and Pretreatment Plant), FLEX's existing natural 
gas sendout pipeline, and the existing sendout pipeline meter station 
at Stratton Ridge. The Liquefaction Plant, Pretreatment Plant, and 
Stratton Ridge Meter Station represent fixed receipt or delivery points 
for the natural gas transported by the sendout pipeline and utilized in 
the liquefaction process. The existing sendout pipeline route 
constitutes the preferred route as it follows an existing right-of-way 
and minimizes environmental impacts.

Environmentally Preferred Alternative

    When compared against the other action alternatives assessed in the 
EIS, as discussed above, the Liquefaction Project/Phase II Modification 
Project is the environmentally preferred alternative. While the No-
Action Alternative would avoid the environmental impacts identified in 
the EIS, adoption of this alternative would not meet the project 
objectives.

Decision

    DOE has decided to issue Order Nos. 3282-C and 3357-B authorizing 
FLEX to export domestically produced LNG by vessel from the Freeport 
LNG Terminal on Quintana Island, Texas to non-FTA countries up to the 
equivalent of 1.8 Bcf/d of natural gas for a term of 20 years.
    Concurrently with this Record of Decision, DOE is issuing Order 
Nos. 3282-C and 3357-B in which it finds that the granting of the 
requested authorizations have not been shown to be inconsistent with 
the public interest, and that the applications should be granted 
subject to compliance with the terms and conditions set forth in Order 
Nos. 3282-C and 3357-B, including the environmental conditions adopted 
in the FERC Order at Appendix A. Additionally, the authorizations are 
conditioned on FLEX's compliance with any other preventative and 
mitigative measures imposed by other Federal or state agencies.

Basis of Decision

    DOE's decision is based upon the analysis of potential 
environmental impacts presented in the EIS, and DOE's determination in 
Order Nos. 3282-C and 3357-B that the opponents of the applications 
have failed to overcome the statutory presumption that the proposed 
export authorizations are not inconsistent with the public interest. 
Although not required by NEPA, DOE also considered the Addendum, which 
summarizes available information on potential upstream impacts 
associated

[[Page 69104]]

with unconventional natural gas activities, such as hydraulic 
fracturing.

Mitigation

    As a condition of its decision to issue Order Nos. 3282-C and 3357-
B authorizing FLEX to export LNG to non-FTA countries, DOE is imposing 
requirements that will avoid or minimize the environmental impacts of 
the project. These conditions include the environmental conditions 
adopted in the FERC Order at Appendix A. Mitigation measures beyond 
those included in DOE Order Nos. 3282-C and 3357-B that are enforceable 
by other Federal and state agencies are additional conditions of Order 
Nos. 3282-C and 3357-B. With these conditions, DOE has determined that 
all practicable means to avoid or minimize environmental harm from the 
project have been adopted.

Floodplain Statement of Findings

    DOE prepared this Floodplain Statement of Findings in accordance 
with DOE's regulations entitled ``Compliance with Floodplain and 
Wetland Environmental Review Requirements'' (10 CFR part 1022). The 
required floodplain and wetland assessment was conducted during 
development and preparation of the EIS (see Sections 4.1.1.3 and 
4.3.1.1 of the EIS). DOE determined that the placement of some project 
components within floodplains would be unavoidable.
    However, the current design for the project minimizes floodplain 
impacts to the extent practicable.

    Issued in Washington, DC on November 14, 2014.
Christopher A. Smith,
Principal Deputy Assistant Secretary, Office of Fossil Energy.
[FR Doc. 2014-27486 Filed 11-19-14; 8:45 am]
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