Mon, Jun 17 2024 17 June, 2024

Chronic air pollution at Calcasieu Pass LNG on U.S. Gulf

Venture Global’s Calcasieu Pass LNG facility continues to spew air contaminants into the atmosphere as operational problems persist. The company wants to build more LNG terminals nearby.

Venture Global's Calcasieu Pass LNG export facility in Cameron Parish, Louisiana (Photo credit: Nick Cunningham/Gas Outlook)

The operational problems at a high-profile LNG export terminal in southwest Louisiana continued through the first half of 2023, resulting in near-constant gas flaring and chronic air pollution in excess of permitted levels, according to a new report.

Venture Global built its Calcasieu Pass LNG facility in Cameron Parish, Louisiana much faster than is typical in the LNG industry, and the company has billed its “modular” approach to construction as a way of cutting costs and providing cheap LNG to customers overseas.

But the facility has been plagued by equipment failures and malfunctions, leading to enormous quantities of air pollutants emitted from the site since it began operations at the start of 2022, as Gas Outlook reported previously. 

“This facility has constant, consistent problems. This dates back to the moment it began operating,” Anne Rolfes, the executive director of Louisiana Bucket Brigade, a state-based NGO, told reporters on a Dec. 13th press call. “Right off the bat they had a significant accident, and really not much has changed since then.”

The Louisiana Bucket Brigade has been monitoring the facility over the past two years and published an update in mid-December, with data compiled for the first six months of 2023. The report finds that out of 181 days, flaring was documented on 71 separate days. After adding in Venture Global’s own filings to state regulators, the total jumps to 115 days during which the facility had operational problems, or 63 percent of the time, according to the report.

Gas flaring is not supposed to be a common occurrence, but is instead supposed to be done only in unusual circumstances to maintain safety in response to a buildup of pressure. Flaring is typically associated with the startup and shutdown of a plant, or during periods of maintenance.

According to a 2018 federal environmental impact statement for Calcasieu Pass, flaring was not expected to be common, only occurring during startup and “occasionally” thereafter.

Despite these claims, things have not gone well. Tall stacks of fire with billowing black smoke are a frequent occurrence. These incidents release hazardous and toxic air pollutants, carbon monoxide, nitrogen oxides, and unburned methane.

But the company is not reporting a complete picture to Louisiana regulators, according to the Bucket Brigade analysis that included time-stamped photos of flares. In other words, on specific days when Calcasieu Pass’ mishaps are visible to the naked eye, the company had not submitted information on what occurred.

In July 2023, the Louisiana Department of Environmental Quality sent a compliance order to Venture Global, noting that the company had violated its permit with the constant streams of air pollution throughout 2022. But as the Louisiana Bucket Brigade report shows, those problems have continued through this year.

The saga is connected to another financial and legal drama playing out, which involves some of the world’s largest oil and gas companies. Several years ago, Venture Global signed sales and purchase agreements (SPAs) with BP, Shell, and Repsol, promising to deliver LNG at set prices upon the startup of full operations. But Venture Global has instead exported LNG cargoes over the past two years from Calcasieu Pass at spot prices, not at price levels spelled out in the contracts. That’s because the company says that Calcasieu Pass is not technically fully operational — in part because of the equipment problems on site that has led to excessive pollution — which prevents the contract from taking effect.

Spot LNG prices soared after Russia’s invasion of Ukraine. Venture Global’s decision to sell on the spot market will allow the company to rake in as much as $17.5 billion between 2022 and the end of 2024, compared to $2.8 billion if it had sold cargoes under its contract, as the Wall Street Journal reports.

The oil majors have cried foul, accusing Venture Global of unscrupulous business practices, and are asking U.S. regulators to step in. Venture Global says the accusations have no merit. 

It’s not clear how that process will play out, but critics say that Venture Global has essentially been able to make enormous profits from its pollution, using its operational problems as a justification to avoid selling cargoes at prices stipulated in its contracts.

LNG buildout continues

The U.S. has eight existing LNG terminals currently in operation (a figure that does not include Calcasieu Pass, which is exporting LNG cargoes but is still technically “under construction”). Additionally, there are seven projects under construction, and a further 11 approved by federal regulators, plus a handful of others on the drawing board. Nearly all of them are concentrated on the Texas and Louisiana coastline.

“The gas export industry is opening up a whole new territory in Louisiana. It’s pretty frightening,” Anne Rolfes said. “It’s not an exaggeration to say that the future of Louisiana depends on it.”

Venture Global is one of the main industry players in Louisiana. The company is hoping to build CP2, a sequel of sorts to Calcasieu Pass, but on an even larger scale. 

It is also building the Plaquemines LNG project on the other side of the state. In its permit application to federal regulators, Venture Global has stated that Plaquemines LNG would be “technologically-identical” to Calcasieu Pass, which raises questions about whether that facility will also have a long commissioning period with excessive pollution levels. Its environmental impact statement says that flaring “may occur up to forty times a year.”

“It is fair to say that there is reason for concern that these other facilities that Venture Global is building will have the same kind of air emissions problems that we’re seeing at the Calcasieu Pass facility,” Sara Sneath, an independent Louisiana-based journalist who has covered Venture Global, told reporters on a press call. She said that the excessive levels of air pollution come on top of the fact that even under normal operating conditions, LNG export terminals are enormous sources of carbon pollution.

“The design flaw causing excessive emissions with the Calcasieu Pass facility could become an issue with the company’s proposed facilities,” Sneath said.

Venture Global did not respond to questions from Gas Outlook.

CP2 has become a flashpoint nationally as a test of the Biden administration’s commitment to climate policy. The recent COP28 summit, which called on countries to transition away from fossil fuels, will put an even greater spotlight on the ongoing expansion of fossil fuels in the U.S.

President Biden has continued to approve new oil and gas drilling projects and LNG export terminals, despite pledging to cut greenhouse gas emissions. The LNG buildout likely put emissions targets far out of reach. 

On December 19, a group of more than 170 U.S. scientists sent a letter to President Biden, calling on him to reject a key permit for Venture Global’s CP2 project, and to put a halt to the broader LNG buildout underway. They note that if all U.S. LNG projects under consideration are built, it would lead to 3.9 billion tons of greenhouse gases emitted annually, larger than the entire annual emissions of the European Union.

“You have often said that your policies will be guided by listening to the science,” the letter states. ”As scientists we are telling you in clear and unambiguous terms that approving CP2 and other LNG projects will undermine your stated goals of meaningfully addressing the climate crisis and put us on a continued path toward escalating climate chaos.”

Rolfes called Venture Global a “rogue company” because of the air emissions from Calcasieu Pass and the company’s lack of transparency. That dismal track record should be taken into account by regulators, she said.

“Venture Global’s operations in Louisiana have been disastrous from day one,” Rolfes said. “There is no way that a company that causes this much harm should receive permits to build additional facilities in our state.”