Environmental Groups Lose Court Challenge to Alaska LNG Exports

(Reuters) – A federal appeals court on Tuesday rejected a challenge by environmental groups to a decision by Democratic former President Joe Biden’s administration approving exports from a planned $39 billion liquefied natural gas project in Alaska.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit held the U.S. Department of Energy’s conclusion that it would be impossible to quantify the project’s contribution to climate-changing greenhouse gases did not violate the National Environmental Policy Act.

The project by the Alaska Gasline Development Corp calls for developing a $44 billion 800-mile (1,300-km) pipeline to move gas stranded in Alaska’s remote north across the state before being shipped overseas.

The Sierra Club and the Center for Biological Diversity had argued the Energy Department’s approval of the project violated the law by overstating the uncertainty of its impact on climate change while ignoring that its claimed economic benefits were themselves speculative.

U.S. Circuit Judge A. Raymond Randolph, writing for the panel, said that Congress in adopting the Natural Gas Act had “expressed a preference for permitting exports, so long as our nation has an abundance of this natural resource, as it does.”

Randolph, an appointee of Republican President George H.W. Bush, said the plaintiffs’ objection to the project was “not well-founded” and that “overwhelming evidence” produced by the agency supported finding the impact LNG exports would have on climate change were too uncertain to quantify.

“In short, the impacts of downstream emissions in foreign countries are not reasonably foreseeable and so any alleged failure to quantify those impacts does not amount to a violation of NEPA,” Randolph wrote.

His opinion was joined by U.S. Circuit Judges Justin Walker, an appointee of Republican President Donald Trump, and Brad Garcia, a Biden appointee.

“Obviously, we’re very pleased with the result,” said Howard Nelson, a lawyer with the Alaska Gasline Development Corp at Greenberg Traurig. He said the project had been thoroughly vetted by the Energy Department and the Federal Energy Regulatory Commission over the last decade.

A spokesperson for Earthjustice, which represented the environmental groups, said it was disappointed and evaluating the decision. The Energy Department did not respond to a request for comment.

In 2020, toward the tail end of Trump’s first term in office, the Energy Department granted approval for LNG exports to countries with which the United States did not have a free trade agreement.

The Energy Department under Biden, at the behest of the environmental group Sierra Club, agreed to conduct new environmental review studies but ultimately reaffirmed the approval of exports in April 2023.

The Energy Department concluded that exports would likely create jobs in the fields of natural gas development, production and transportation, help lower natural gas prices in the state and boost the national gross domestic product.

The project continues to have Trump’s backing now that he is back in office. Last month, Alaska’s governor and state representatives visited Japan and three other Asian countries to court investors for the project.

The case is Sierra Club v U.S. Department of Energy, U.S. Court of Appeals for the District of Columbia Circuit, No. 20-1503.

Reporting by Nate Raymond in Boston

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