By Kelsey Ayers

The Alaska LNG project is a massive $45 billion initiative aimed at commercializing natural gas from Alaska’s North Slope.[1] The project includes constructing an 807-mile pipeline from Prudhoe Bay to a gas treatment plant and liquefaction facility on the Kenai Peninsula, designed to export liquefied natural gas (LNG) primarily to Asian markets.[2]

The project has received support across multiple U.S. administrations.[3] In April 2023, the Biden administration authorized LNG exports as part of the Department of Energy’s approval, reaffirming a decision made during the Trump administration.[4] The DOE had temporarily paused new LNG authorizations in 2021 to conduct a supplemental National Environmental Policy Act (NEPA) review, addressing concerns about the project’s environmental and climate impacts.[5] However, the Biden administration ultimately determined that the project would provide significant economic benefits while balancing environmental risks​.[6]

The Alaska LNG project is likely to clear the latest legal challenge posed by environmental groups, as two of the three judges on the D.C. Circuit Court of Appeals expressed skepticism during oral arguments on October 21, 2024.[7] The environmental groups, including the Sierra Club and Center for Biological Diversity, have argued that the project poses significant climate and environmental risks, including harm to wildlife like the critically endangered Cook Inlet beluga whale, and that the DOE’s reauthorization of LNG exports was flawed.[8]

The core of the legal challenge focuses on whether the DOE’s decision to reauthorize the project adequately balanced the environmental harms against the economic and energy security benefits under the Natural Gas Act (NGA) and NEPA.[9] The NGA establishes a presumption in favor of natural gas exports but requires projects to demonstrate that they serve the public interest, balancing economic benefits against environmental harms.[10] NEPA mandates that agencies conduct thorough reviews of environmental impacts before approving major projects.[11] The environmentalists argued that the DOE’s review was inadequate and overly speculative, particularly regarding the climate impacts.[12] The DOE, however, maintains that it performed an extensive review and concluded that the benefits of the project outweigh potential harms.[13]

During oral arguments, Judge Justin Walker highlighted the NGA’s presumption in favor of gas exports, questioning whether the act is the appropriate legal framework for challenging the project, particularly when economic benefits are clearer than the speculative environmental harms.[14] Earthjustice attorney Moneen Nasmith countered that the NGA does not mandate approval of all gas exports and emphasized that the DOE failed to provide a balanced assessment of harms and benefits.[15] However, both Judge Walker and Judge A. Raymond Randolph appeared unconvinced that the project would cause immediate climate harm, with Judge Randolph even questioning the timeframe and impact of climate change itself.[16]

The DOE’s defense, represented by John Smeltzer, pointed out that the agency took a “hard look” at all environmental factors, balancing those against economic and international trade benefits.[17] The DOE found the project would be beneficial both for Alaska’s economy and U.S. allies dependent on gas, despite finding that the project would contribute to greenhouse gas emissions.[18]

The outcome of this case can significantly impact how energy infrastructure projects navigate legal and environmental scrutiny. If the court sides with the DOE, it will reinforce the presumption in favor of gas exports under the NGA, weakening future challenges by environmental groups. This could encourage the development of more large-scale LNG projects, as agencies would feel less pressure to delay projects over speculative climate concerns. Corporations in the energy sector would likely perceive this ruling as a green light for projects that prioritize economic benefits, including expanding trade with Asia, over uncertain environmental risks.

Conversely, if the environmental groups prevail, it would set a new precedent for how environmental impacts, particularly long-term climate risks, must be addressed in federal energy approvals. This could lead to stricter environmental standards for projects under NEPA, forcing energy developers to refine their assessments of greenhouse gas emissions and wildlife impacts. Businesses might face greater expectations to reduce emissions, protect wildlife, and demonstrate environmental stewardship to avoid litigation, pushing the industry toward more sustainable, proactive practices even in projects already underway.

In conclusion, a win for the DOE would streamline the approval process for future LNG projects, prioritizing economic and energy security considerations. However, a victory for the environmental groups would enhance the role of environmental law in shaping energy policy, driving more cautious approaches to fossil fuel development and international trade relations.

[1] Niina H. Farah, DC Circuit Leans Toward DOE in Fight over Alaska Gas Exports, Politico (Oct. 22, 2024, 6:32 AM), https://www.eenews.net/articles/dc-circuit-leans-toward-doe-in-fight-over-alaska-gas-exports.

[2] Timothy Gardner, Biden Admin Greenlights LNG Exports from Alaska Project, Reuters, Apr. 14, 2023, https://www.reuters.com/business/energy/biden-admin-greenlights-lng-exports-alaska-project-document-2023-04-14/.

[3] Nate Raymond, US Appeals Court Likely to Reject Challenge to Alaska LNG Exports, Reuters, Oct. 21, 2024, https://www.reuters.com/legal/government/us-appeals-court-likely-reject-challenge-alaska-lng-exports-2024-10-21.

[4] Id.

[5] Ali Sullivan, DC Circ. Unsure Right Law Used to Challenge Alaska LNG Project, Law360 (Oct. 21, 2024, 6:37 PM), https://www.law360.com/internationaltrade/articles/1891916/dc-circ-unsure-right-law-used-to-challenge-alaska-lng-project.

[6] Gardner, supra note 2.

[7] Raymond, supra note 3.

[8] Lawsuit Challenges Federal Approval of Alaska LNG Exports, EARTHJUSTICE (Aug. 11, 2023), https://earthjustice.org/press/2023/lawsuit-challenges-federal-approval-of-alaska-lng-exports.

[9] See generally Request for Rehearing at 2-8, Sierra Club v. U.S. Dep’t of Energy, No. 20-1503 (D.C. Cir. filed Feb. 5, 2021).

[10] 15 U.S.C. § 717 (2011); Sullivan, supra note 5.

[11] What Is the National Environmental Policy Act?, EPA, https://www.epa.gov/nepa/what-national-environmental-policy-act (last visited Oct. 23, 2024).

[12] Id.

[13] Raymond, supra note 3.

[14] U.S. Appeals Court Likely to Reject Challenge to Alaska LNG Exports, EnergyNow (Oct. 22, 2024), https://energynow.com/2024/10/u-s-appeals-court-likely-to-reject-challenge-to-alaska-lng-exports/.

[15] See Farah, supra note 1.

[16] Id.

[17] Farah, supra note 1; see U.S. Dep’t of Energy, Final Supplemental Environmental Impact Statement for the Alaska LNG Project, DOE/EIS-0512-S1 (2023), https://www.energy.gov/sites/default/files/2023-01/final-seis-0512-s1-alaska-lng-summary-2023-01.pdf (finding that while the project would contribute to cumulative GHG emissions, the differences in emissions between the project and the No Action Alternatives were not substantial enough to justify halting the project).

[18] Raymond, supra note 3.