[Federal Register Volume 81, Number 151 (Friday, August 5, 2016)]
[Notices]
[Pages 51870-51872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18652]


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DEPARTMENT OF ENERGY


Record of Decision and Floodplain Statement of Findings for the 
Lake Charles Exports, LLC Application To Export Liquefied Natural Gas 
to Non-Free Trade Agreement Countries

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 
Lake Charles Exports, LLC (LCE), DOE/FE Docket No. 11-59-LNG, to issue 
DOE/FE Order No. 3324-A, granting final long-term, multi contract 
authorization for LCE to engage in the export of domestically produced 
liquefied natural gas (LNG) from the Lake Charles Terminal located in 
Lake Charles, Calcasieu Parish, Louisiana (Terminal), in a volume 
equivalent to 730 Bcf/yr of natural gas for a term of 20 years. LCE is 
seeking to export LNG from the Terminal to countries with which the 
United States has not entered into a free trade agreement (FTA) that 
requires national treatment for trade in natural gas, and with which 
trade is not prohibited by U.S. law or policy (non-FTA countries). 
Order No. 3324-A is issued under section 3 of the Natural Gas Act (NGA) 
\1\ and 10 CFR part 590 of DOE's regulations.\2\ DOE participated as a 
cooperating agency with the Federal Energy Regulatory Commission (FERC) 
in preparing an environmental impact statement (EIS) \3\ analyzing the 
potential environmental impacts resulting from modification of the 
existing facilities at the Terminal.
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    \1\ The authority to regulate the imports and exports of natural 
gas, including liquefied natural gas, under section 3 of the NGA (15 
U.S.C. 717b) has been delegated to the Assistant Secretary for FE in 
Redelegation Order No. 00-006.02 issued on November 17, 2014.
    \2\ 10 CFR part 590 (2012).
    \3\ Federal Energy Regulatory Commission, Final Environmental 
Impact Statement for the Lake Charles Liquefaction Project, Docket 
Nos. CP14-119-000, CP14-120-000, and CP14-122-000 (Aug. 2015).

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 No. 3324-A is available on DOE/
FE's Web site at: http://www.fossil.energy.gov/programs/gasregulation/authorizations/2011_applications/lake_charles_exports.html. For 
additional information about the docket in these proceedings, contact 
Larine Moore, U.S. Department of Energy, Office of Regulation and 
International Engagement, Office of Oil and Natural Gas, Office of 
Fossil Energy, Room 3E-042, 1000 Independence Avenue SW., Washington, 
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DC 20585.

FOR FURTHER INFORMATION CONTACT: To obtain additional information about 
the EIS or the ROD, contact Mr. Kyle W. Moorman, U.S. Department of 
Energy (FE-34), Office of Regulation and International Engagement, 
Office of Oil and Natural Gas, Office of Fossil Energy, Room 3E-042, 
1000 Independence Avenue SW., Washington, DC 20585, (202) 586-5600, or 
Mr. Edward Le Duc, U.S. Department of Energy (GC-51), Office of the 
Assistant General Counsel for Environment, 1000 Independence Avenue 
SW., Washington, DC 20585.

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

    LCE is a Delaware limited liability company with its principal 
place of business in Houston, Texas. In a Notice of Change in Control 
recently submitted to DOE/FE,\4\ LCE states that, on February 15, 2016, 
Royal Dutch Shell, plc (Shell) acquired all of the share capital of BG 
Group plc (BG). Prior to the transaction, LCE was owned by subsidiaries 
of BG and Energy Transfer Equity, L.P. (ETE), and LCE's affiliate, BG 
LNG Services, LLC (BGLS), was an indirect subsidiary of BG. As a result 
of the transaction, LCE is now owned by subsidiaries of Shell and ETE 
\5\ and BGLS is now an indirect wholly-owned subsidiary of Shell. 
According to LCE, LCE will remain the authorization holder for its 
existing DOE/FE authorizations and/or the applicant in its pending DOE/
FE proceedings.
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    \4\ See Lake Charles Exports, LLC, Notice of Change in Control 
(Feb. 17, 2016) and DOE/FE letter responding to Notice (July 26, 
2016) in DOE/FE Docket No. 11-59-LNG.
    \5\ DOE/FE takes administrative notice that Shell is a public 
limited company incorporated in the United Kingdom and headquartered 
in the Netherlands. ETE is a Delaware master limited partnership 
with its principal place of business in Dallas, Texas.
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    On May 6, 2011, LCE filed the application (Application) with DOE/FE 
seeking authorization to export domestically produced LNG from proposed 
liquefaction facilities (Liquefaction Project) to be located at the 
existing Terminal in Lake Charles, Louisiana. LCE proposes to export 
this LNG to non-FTA countries in a total volume equivalent to 730 
billion cubic feet per year (Bcf/yr) of natural gas.
    The Terminal is owned and operated by Lake Charles LNG Company, LLC 
(Lake Charles LNG, formerly Trunkline LNG Company, LLC), a corporate 
affiliate of LCE.\6\ The Liquefaction Project will be owned by Lake 
Charles LNG Export Company, LLC (formerly Trunkline LNG Export, LLC), 
another corporate affiliate of LCE which is separately pursuing an 
authorization to

[[Page 51871]]

export the same volume of LNG to non-FTA countries in DOE/FE Docket No. 
13-04-LNG.\7\ Lake Charles LNG and Lake Charles LNG Export Company are 
both owned by Energy Transfer Equity, L.P. and Energy Transfer 
Partners, L.P.
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    \6\ In September 2014, Trunkline LNG Company, LLC changed its 
name to Lake Charles LNG Company, LLC. See, Lake Charles LNG Export 
Co. LLC, DOE/FE Order No. 3252-A, FE Docket No. 13-04-LNG, Order 
Granting Request to Amend DOE/FE Order No. 3252 and Pending 
Application to Reflect Corporate Name Change (Mar. 18, 2015).
    \7\ On Oct. 10, 2014, Trunkline LNG Export, LLC filed a request 
in DOE/FE Dkt. No. 13-04-LNG to change its corporate name to Lake 
Charles Export Company, LLC. Order 3252-A granted the name change.
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    On August 7, 2013, DOE/FE issued Order No. 3324 (Conditional Order) 
to LCE, conditionally granting the portion of LCE's Application that 
requested long-term, multi-contract authority to export domestically 
produced LNG to non-FTA countries. Under the terms of that Conditional 
Order, LCE is conditionally authorized to export up to 15 mtpa, which 
LCE states is equivalent to approximately 730 billion Bcf/yr of natural 
gas (2.0 Bcf/d), by vessel from the Terminal for a term of 20 years. 
The Conditional Order reviewed the record evidence and entered findings 
on all non-environmental issues considered under NGA section 3(a), 
including the economic impacts, international impacts, and security of 
natural gas supply associated with LCE's proposed exports. Because DOE 
must also consider environmental issues, DOE/FE conditioned the order 
on: (i) FERC's satisfactory completion of the NEPA environmental review 
process, and (ii) DOE/FE's own issuance of a finding of No Significant 
Impact (FONSI) or a Record of Decision (ROD) under NEPA.\8\
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    \8\ LCE Conditional Order, DOE/FE No. 3324, at 133-34 (Term and 
Condition Para. H).
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    LCE states that FERC certificated the Terminal in 1977 and the 
original construction was completed in 1981.\9\ LCE states that Lake 
Charles LNG has expanded and enhanced the Terminal through the 
construction of additional storage capacity, additional gas-fired 
vaporization capacity, an additional marine berth, ambient air 
vaporization equipment, and natural gas liquids extraction capability.
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    \9\ Trunkline LNG Co., et al., 58 FPC 726 (Opinion No. 796), 
order on reh'g 58 FPC 2935 (1977) (Opinion No. 796-A).
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    According to LCE, the Terminal currently has a firm sustained 
sendout capacity of 1.8 Bcf/d and a peak sendout capacity of 2.1 Bcf/
day. The Terminal has four LNG storage tanks with a combined capacity 
of approximately 425,000 cubic meters of LNG, or approximately 9.0 Bcf 
of natural gas. The Terminal's natural gas liquids processing 
facilities allow the extraction of ethane and other heavier 
hydrocarbons from the LNG stream.

Project Description

    Among other features, the Liquefaction Project will include a new 
liquefaction facility consisting of three liquefaction trains, 
modifications and upgrades at the existing Terminal, and approximately 
0.5 miles of 48-inch diameter feed gas line in Calcasieu Parish, 
Louisiana, to supply natural gas to the liquefaction facility from 
existing gas transmission pipelines.\10\
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    \10\ See Trunkline LNG Company, LLC et al., Supplemental Notice 
of Intent to Prepare an Environmental Impact Statement for the 
Planned Lake Charles Liquefaction Project and Request for Comments 
on Environmental Issues, FERC Docket No. PF12-8-000, at 2 (Mar. 21, 
2013), available at http://energy.gov/sites/prod/files/EIS-0491-FERC-SNOI-2013.pdf.
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    LCE states that, following completion of the Liquefaction Project, 
the Terminal will be bi-directional, meaning it will be capable of 
importing or exporting LNG, and its peak and sustained sendout 
capabilities will not be affected.

EIS Process

    FERC was the lead federal agency and initiated the NEPA process by 
publishing a Notice of Intent (NOI) to prepare an EIS in the Federal 
Register (FR) on September 20, 2012 (77 FR 58373); DOE was a 
cooperating agency. FERC issued the draft EIS for the Liquefaction 
Project on April 10, 2015 (80 FR 20489), and the final EIS on August 
20, 2015 (80 FR 50622). The final EIS addresses comments received on 
the draft EIS. Among other resource areas, the final EIS addresses 
geology, soils, water, wetlands, wildlife, air quality and noise, 
cumulative impacts and alternatives.\11\
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    \11\ See Final EIS at 1-10, Table 1.3-1 Key Environmental 
Concerns Identified During the Scoping Process for the Lake Charles 
Liquefaction Project.
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    The final EIS recommended that FERC subject any approval of LCE's 
proposed Liquefaction Project to 96 conditions to reduce the 
environmental impacts that would otherwise result from the construction 
and operation of the project. On December 17, 2015, FERC issued an 
Order Granting Section 3 and Section 7 Authorizations and Approving 
Abandonment (FERC Order),\12\ which authorized Lake Charles LNG to 
site, construct, and operate the Lake Charles Liquefaction Project, 
subject to 95 of the 96 environmental conditions in Appendix B of that 
Order.
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    \12\ Trunkline Gas Co., LLC, et al., Order Granting Section 3 
and Section 7 Authorizations and Approving Abandonment, 153 FERC ] 
61,300 (Dec. 17, 2015).
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    In accordance with 40 CFR 1506.3, after an independent review of 
FERC's final EIS, DOE/FE adopted FERC's final EIS for the Lake Charles 
Liquefaction Project (DOE/EIS-0491), and the U.S. Environmental 
Protection Agency published a notice of the adoption on July 15, 2016 
(81 FR 46077).

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 to 
Environmental Review Documents Concerning Exports of Natural Gas From 
the United States (Draft Addendum) for public comment (79 FR 32258). 
The purpose of this review was to provide additional information to the 
public concerning the potential environmental impacts of unconventional 
natural gas exploration and production activities, including hydraulic 
fracturing. 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 
in this and other LNG export proceedings.
    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 Final 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 this proceeding.

Alternatives

    The EIS assessed alternatives that could achieve the Liquefaction 
Project objectives. The range of alternatives analyzed included the No-
Action Alternative, system alternatives, pipeline system alternatives, 
alternative liquefaction facility sites, alternative terminal 
configurations, alternative aboveground facility sites for pipeline 
expansion, and alternative power sources. Alternatives were evaluated 
and compared to the Lake Charles Liquefaction Project to determine if 
the alternatives were environmentally preferable.
    Under the No-Action Alternative, the Liquefaction Project would not 
be developed. Additionally, the potential adverse and beneficial 
environmental impacts discussed within the EIS would not occur. 
Furthermore, this alternative could also require that potential end-
users make different arrangements to obtain natural gas services, use 
other fossil fuel energy sources (e.g. coal or

[[Page 51872]]

fuel oil), or possibly use traditional long-term energy sources (e.g. 
nuclear power) and/or renewable energy sources to compensate for lack 
of natural gas that would otherwise come from the supplies produced by 
the Liquefaction Project.
    The EIS evaluated system alternatives for the Liquefaction Project, 
including six operating LNG import terminals in the Gulf of Mexico 
area, and several proposed or planned export projects along the Gulf 
Coast. All of the system alternatives were eliminated from further 
consideration for reasons that include the need for substantial 
construction beyond that currently proposed, production volume 
limitations, in-service dates scheduled significantly beyond LCE's 
commitments to its customers, and potential environmental impacts that 
were considered comparable to or greater than those of the Liquefaction 
Project.
    The EIS evaluated three pipeline system alternatives for the 
Liquefaction Project. In order to be a viable pipeline system 
alternative, the alternative system would have to transport all or a 
part of the volume of natural gas required for liquefaction at the 
proposed new facility and cause significantly less impact on the 
environment. Additionally, a legitimate pipeline alternative must 
either connect directly to the proposed facility or to the existing 
pipeline system. Each of the three alternatives pipeline systems 
considered would require significant expansions in their looping and 
compression capabilities to achieve the necessary delivery capacity and 
require the construction of new segments to connect directly with the 
liquefaction facility. The construction associated with the 
alternatives, including significantly increasing pipeline looping 
capability or expansion, would result in environmental impacts equal to 
or greater than the proposed pipeline system. As a result, none of the 
three proposed pipeline alternatives would provide a significant 
environmental advantage over the existing and proposed pipeline system.
    The EIS evaluated five Liquefaction Project sites (including the 
current proposed site), all within relative close proximity to the 
existing Terminal. Construction of the Terminal at each of the 
alternative sites would have greater environmental impacts when 
compared to the proposed Terminal site; therefore, none of the four 
other sites evaluated were determined to be environmentally preferred.
    For the Liquefaction Project configuration (e.g. siting for 
components such as liquefaction trains, pretreatment units and pipeline 
connections), the EIS considered the use, design, and configuration 
subject to the requirements of 49 CFR 193 and other industry or 
engineering standards. The EIS evaluated factors such as locations of 
interconnecting LNG transfer piping, operational noise, vapor 
dispersion requirements, and site evaluation associated with impacts on 
surrounding wetlands. Regulatory requirements associated with thermal 
exclusion and vapor dispersion zones would require additional fill 
material to increase elevation at the site that will likely cause 
further wetland losses on the site. As a result, the proposed 
configuration was determined to be environmentally preferred.
    The EIS evaluated several alternative sites for the proposed above-
ground facilities (e.g. one new compressor (Compressor Station 203-A) 
station and five new metering stations) for pipeline expansion. In each 
of the alternative sites analyzed for the facilities, the environmental 
impacts from construction and operational activities (e.g., increased 
noise and air emissions) would not be environmentally preferred to the 
proposed sites.

Environmentally Preferred Alternative

    When compared against the other action alternatives assessed in the 
EIS, as discussed above, the Lake Charles Liquefaction 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 Liquefaction Project objectives.

Decision

    DOE has decided to issue Order No. 3324-A authorizing LCE to export 
domestically produced LNG by vessel from the Terminal located in Lake 
Charles, Calcasieu Parish, Louisiana, in a volume up to the equivalent 
to 730 Bcf/yr of natural gas for a term of 20 years to commence on the 
earlier of the date of first export or seven years from the date that 
the Order is issued.
    Concurrently with this Record of Decision, DOE is issuing Order No. 
3324-A in which it finds that the requested authorization has not been 
shown to be inconsistent with the public interest, and the Application 
should be granted subject to compliance with the terms and conditions 
set forth in the Order, including the environmental conditions 
recommended in the EIS and adopted in the FERC Order at Appendix B. 
Additionally, this authorization is conditioned on LCE'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 No. 3324-A that the opponents of LCE's Application have failed to 
overcome the statutory presumption that the proposed export 
authorization is not inconsistent with the public interest. Although 
not required by NEPA, DOE/FE also considered the Addendum, which 
summarizes available information on potential upstream impacts 
associated with unconventional natural gas activities, such as 
hydraulic fracturing.

Mitigation

    As a condition of its decision to issue Order No. 3324-A 
authorizing LCE 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 
recommended in the EIS and adopted in the FERC Order at Appendix B. 
Mitigation measures beyond those included in Order No. 3324-A that are 
enforceable by other Federal and state agencies are additional 
conditions of Order No. 3324-A. With these conditions, DOE/FE has 
determined that all practicable means to avoid or minimize 
environmental harm from the Liquefaction 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 assessment was conducted during development and 
preparation of the EIS (see Sections 3.3.1, 3.3.2, 4.1.3.4, and 
4.13.2.1 of the EIS). DOE determined that the placement of some project 
components within floodplains would be unavoidable. However, the 
current design for the Lake Charles Liquefaction Project minimizes 
floodplain impacts to the extent practicable.

    Issued in Washington, DC, on July 29, 2016.
Christopher A. Smith,
Assistant Secretary, Office of Fossil Energy.
[FR Doc. 2016-18652 Filed 8-4-16; 8:45 am]
 BILLING CODE 6450-01-P