Ginny Cleaveland, Deputy Press Secretary, Fossil-Free Finance, Sierra Club, email@example.com, 415-508-8498
BROWNSVILLE, TEXAS — Ahead of Rio Grande LNG’s push toward a final investment decision, the Sierra Club and Rainforest Action Network released a report on the risks to the Rio Grande Valley from two LNG proposals and associated pipeline infrastructure. The report combats false solutions and details community opposition, climate and health impacts, ecosystem damage, and the reputational & financial risk to the institutions financing the projects.
The third edition of the report, titled “Rio Grande Valley: At Risk From Fracked-Gas Export Terminals”, was released in partnership with the Carrizo Comecrudo Tribe, Les Amis de la Terre France, and Save RGV. It provides an overview of what stands to be lost if both proposed LNG terminals — Texas LNG and Rio Grande LNG — and the additional necessary infrastructure — Rio Bravo Pipeline — are developed.
“If the fossil fuel industry gets its way, it would transform the pristine coastal land of the Rio Grande Valley into an industrial LNG export hub. This area is a haven for wildlife, fishing, and recreation, and it is home to Latinx and Indigenous communities. Any financial institution involved with these proposed projects should immediately back out of these projects because they face serious reputational and financial risks,” said Rebekah Hinojosa, Gulf Coast Campaign Representative for the Sierra Club.
COMMUNITY, CLIMATE & ECOSYSTEM IMPACTS
If built, the Texas LNG and Rio Grande LNG projects, and associated pipelines, would extensively and negatively impact community health, Indigenous rights, endangered species, and the climate. According to the report:
- Community health impacts: The projects would emit harmful pollutants, impacting the health of nearby low-income Latinx and Indigenous communities. The projects would degrade local fishing and tourism industries, a large part of the local economy.
- Indigenous rights: Texas LNG is proposed on a sacred burial site of the Carrizo Comecrudo Tribe. The burial site is on the National Park Service’s list of historic places and has been declared an endangered site by the World Monuments Fund.
- Ecosystem damage: The projects are in an unindustrialized area of the Texas Gulf Coast and would pave over undeveloped wetlands, pollute neatby wildlife refuges, and divide a wildlife corridor. The projects would destroy habitat for multiple endangered species.
- Climate impacts: The two LNG terminals would release as much greenhouse gas emissions as approximately 40.4 million cars each year. The projects would contribute to the expansion of fracking in Texas, and would be counterproductive to the UN Paris Agreement’s 1.5°C goal.
“The banks, regulatory agencies, and companies have never consulted with the Carrizo Comecrudo Tribe of Texas about pushing the Rio Grande LNG and Texas LNG projects on our Native lands,” said Juan Mancias, Tribal chairman of the Carrizo Comecrudo Tribe of Texas. “LNG exports are another cycle of colonization that our Tribal members are fighting against. Rio Grande LNG and Texas LNG are invading the community, would desecrate our lands, bulldoze sacred sites, and harm our tribal members’ health and safety and turn the area into a sacrifice zone.”
REPUTATIONAL & FINANCIAL RISK
The project’s financial backers — including Macquarie Capital, Société Générale, and Credit Suisse — also face severe reputational and financial risk for continuing to support the project. Not only is the LNG market projected to remain unstable and threaten any new export projects as future stranded assets, but ongoing litigation and permitting delays due to community opposition will continue to push back the timelines for these projects. According to the report:
- Reputational risk: Several banks, including French bank BNP Paribas, and customers, including in Cork, Ireland, have withdrawn from the project due to community opposition. A similar nearby export project, Annova LNG, was canceled, citing community opposition and the unstable global market for LNG.
- Financial risk: A major lawsuit victory is forcing the Federal Energy Regulatory Commission (FERC) to re-review the climate and environmental justice impacts of the project. Texas LNG also does not have a key federal clean water permit. Any delays caused by legal challenges could create financial risk for project backers.
- Financial risk: A report from the Institute for Energy Economics and Financial Analysis (IEEFA) shows how the LNG market is projected to remain unstable. The U.S. is on track to surpass its commitment to fill the gap left by Russian gas, making it clear that no additional LNG terminals are needed to meet European demand.
The Federal Energy Regulatory Commission (FERC) has authorized both LNG export projects, as well as the Rio Bravo Pipeline. But the companies have yet to make a Final Investment Decision (FID) to commit and proceed with the project, which would signal that the company has made its major financial commitments and secured financing.
“Nearly four years behind schedule, the two remaining LNG terminals in the Rio Grande Valley have been plagued with delays because of opposition, lawsuits, and the unstable gas market. With the international scientific community and agencies calling for no fossil fuel expansion, there isn’t a need for these terminals. LNG and fracked gas is not a bridge or transition fuel. No bank or financial institution has any business in expanding fossil fuels, especially not in sacred burial sites or in environmental justice communities,” said Ruth Breech, Senior Campaigner for Rainforest Action Network.
Due to these risks, the Sierra Club and Rainforest Action Network are calling on the financial institutions and decision makers of these projects to:
- Financial institutions: Don’t provide direct or indirect financial support for proposed LNG export projects, or any fossil fuel expansion, in line with the International Energy Agency’s Net Zero by 2050 report.
- Financial institutions: Don’t support LNG export projects that exacerbate environmental injustice or that don’t meet Free, Prior, and Informed Consent of Indigenous Peoples.
- Financial institutions: Do align overall corporate financing policies, sectoral emissions reduction targets, and lending and underwriting activities with the UN Paris Agreement’s 1.5°C goal.
- Local government: Do consider environmental justice to ensure that low-income communities and communities of color do not suffer disproportionately from hazardous pollution.
- Federal government: Do vacate existing project approvals and deny permit applications for the two LNG export projects due to local impacts. Do end taxpayer financing and subsidies for LNG export terminals.
- Federal government: Do protect Americans from the risk of undisclosed stranded assets and other climate-related financial risk by supporting the Securities and Exchange Commission’s proposed climate risk disclosure rule.
WEBINAR ON RIO GRANDE VALLEY LNG
Rebekah Hinojosa, Gulf Coast Campaign Representative for the Sierra Club’s Beyond Dirty Fuels campaign, will be speaking about LNG export proposals during a presentation, “The U.S. LNG Buildout: What’s Happening and How Communities Are Fighting Back” at the Institute for Energy Economics and Financial Analysis (IEEFA) Energy Finance 2022 conference, happening October 17-19 in New York.
The session, which runs from 10:30-11:50 a.m. on Tuesday, October 18, will be livestreamed on the Sierra Club’s Texas Gulf Coast chapter’s Facebook page here: https://www.facebook.com/TexasSierraClub.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.