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Created on: 2017-08-04 10:33:31
Last update: 2021-03-11 00:00:00 BankTrack & Rainforest Action Network
Alison Kirsch, Climate and Energy Program and Research Coordinator, Rainforest Action Network
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About Rio Grande LNG Terminal
In the port of Brownsville, Texas, in the USA, NextDecade is planning to build the Rio Grande LNG export terminal. The facility will be supplied with natural gas from a gas pipeline, the Rio Bravo Pipeline (owned by Enbridge). According to NextDecade's subsidiary, Rio Grande LNG, the investment for their LNG terminal and required infrastructure would amount to USD 20 billion.
Why this profile?
The Rio Grande LNG terminal project threatens local wetlands consisting of coastal prairie and native brush. It is also next to the Bahia Grande, the largest wetlands restoration project in North America.
What must happen
In general LNG export terminals are capital-intensive, financially risky and environmentally destructive. Financial institutions involved in these projects share responsibility for the impacts of these facilities. These impacts span people and ecosystems across the continent: communities around the terminal site, communities at the point of extraction and communities along the pipeline routes.
By financing practices that are incompatible with a climate-stable future, the financial institutions involved threaten the global agreement to address climate change. Therefore, Société Générale, Macquarie and SMBC should withdraw their involvement in this project.
Social and human rights impacts
The public health impacts of climate change in U.S. Gulf Coast states—Texas, Louisiana, Mississippi, Alabama, and Florida—may be especially severe and further exacerbated by a range of threats facing the coastline areas, including severe erosion, subsidence, and—given the amount of energy production infrastructure—the ever-present potential for large-scale industrial accidents. The Gulf Coast population is expected to reach over 74 million by 2030 with a growing number of people living along the coastlines. Populations in the region that are already vulnerable because of economic or other disparities may face additional risks to health and well-being as a consequence of a changing climate, creating new levels of concern for political and public health leaders.
Communities that would feel the negative impacts of the LNG terminals are often low-income people of colour. The Rio Grande LNG Terminal will be located between the Laguna Madre communities and next to Brownsville, a rural community that is around 90 percent Hispanic or Latino. More than 34 percent of the Rio Grande Vallley's residents live in poverty, the highest rate of any metropolitan area in the United States. Already this region struggles with major health issues. These projects would add thousands of tons of pollutants into the air. Across the United States nearly 1.78 million Latinos already live in areas that face a cancer risk above the EPA's level of concern from toxins emitted by oil and gas facilities. Industrial ozone smog burdens Latino communities with 153,000 childhood asthma attacks and 112,000 lost school days each year.
If built, this LNG terminal could significantly impact the local fishing, shrimping and ecotourism industries. Nearby South Padre Island could have its beauty and its economy compromised by the release of effluent water, and the brown haze that would come with the thousands of tons of air pollution.
In the Rio Grande Valley, nature tourism alone leads to 6,600 jobs. In contrast, an LNG terminal creates mostly temporary construction jobs and only a few hundred permanent ones. (Source: RAN)
Environmental and climate impacts
The terminal is proposed right on the edge of what the US Fish and Wildlife Service calls 'one of the largest and most succesful coastal wetland restoration projects in the US': the Bahia Grande unit of the Laguna Atascosa National Wildlife refuge, where wetland restoration is still ongoing. The 21,700 acre refuge is a safe haven for a range of species and native vegetation, as well as a crucial storm barrier. Endangered ocelots and Aplomado falcons roam this area. As of August 2015 only 53 ocelots were left in Texas, all in this area of the state. Construction, bright lights, tall structures, air pollution and wastewater will fundamentally alter the ecosystem of the area. (RAN)
With these three terminals (Rio Grande LNG, Texas LNG and Annova LNG) exporting at full capacity, burning just one year's worth of the gas exported from Brownsville would create greenhouse gas emissions equivalent to the annual emissions of 30 coal-fired power plants. Accounting for extracting, piping, liquefying and shipping the gas nearly doubles the carbon intensity of energy produced from RGV's exported LNG. LNG is the most carbon-intensive form of natural gas.
Applicable norms and standards
Final Investment Decision on Rio Grande LNG postponed to 2021
A final investment decision on NextDecade's proposed Rio Grande LNG export facility in Brownsville, Texas, has been delayed until next year amid challenging market conditions. No update was provided to a previous target of beginning commercial exports as early as 2023. Startup will likely be later, however, given the new FID timing and the up to four years it takes to build a traditional large-scale US liquefaction facility. NextDecade shares rose sharply Monday, amid an overall jump in the equity market and its expectation that it will have more than sufficient cash to continue project development. (S&P Global)
Lawsuits challenge approval of Rio Grande and Annova fracked gas export facilities in Texas for harm to endangered Ocelot
Today, environmental groups filed a lawsuit challenging the U.S. Fish and Wildlife Service’s (FWS) approval of the massive Annova LNG fracked gas export terminal proposed for southern Texas. The suit was filed in conjunction to one the groups filed last week challenging the Rio Grande fracked gas export facility proposed for the same area. These projects threaten to contribute to the extinction of the endangered ocelot in the U.S.
FERC authorizes construction and operation of Rio Grande LNG project and associated Rio Bravo Pipeline
NextDecade, sponsor of the Rio Grande LNG export facility, announced that the Federal Energy Regulatory Commission (FERC) has issued an order authorizing the siting, construction and operation of the proposed Rio Grande liquefied natural gas (LNG) export facility in Brownsville, Texas and the associated Rio Bravo Pipeline (NextDecade press release).
Societe Generale and Macquarie named financial advisors for Rio Grande LNG
NextDecade, LLC said it has appointed Societe Generale and Macquarie Capital to act as joint financial advisors in conjunction with the anticipated debt and equity financing for the construction of its Rio Grande LNG and associated Rio Bravo Pipeline projects. Rio Grande LNG is a proposed LNG export facility at the Port of Brownsville, Texas, planned for a 984-acre industrial site. The LNG project and its associated Rio Bravo pipeline are in the midst of the Federal Energy Regulatory Commission (FERC) permitting process.
The first tranche of financing totals USD 8 billion, consisting of USD 4.4 billion debt and USD 3.6 billion equity (IJGlobal database).
Sumitomo Mitsui Banking Corporation was named mandated lead arranger in 2015. Macquarie Bank and Société Générale were selected as financial advisors in 2017 (IJGlobal).
In August 2018, the South Korean company Hanwha acquired a 10% stake in the project. The remaining 90% remains owned by NextDecade.
In February 2020 Enbridge acquired 100 percent of the share capital of Rio Bravo Pipeline and assumed all responsibility for developing the pipeline. NextDecade stated it would continue to be responsible for the development, financing, construction, and operations of its Rio Grande LNG export facility (NextDecade press release).
Bechtel United States
Enbridge Inc Canada
Great Lakes Dredge & Dock Co LLC United States
Hanwha South Korea
Occidental Petroleum Corp United States
Plan to import gas through Cork harbour abandoned as port company severs ties with US firm
NextDecade Provides Corporate Update, Confirms Capital Resources Sufficient to Sustain Operations Through Year-End 2021
NextDecade's Rio Grande LNG is latest US export project to delay FID until 2021
Lawsuits challenge approval of Rio Grande and Annova fracked gas export facilities in Texas for harm to endangered ocelot
Banking on Climate Change – Fossil Fuel Finance Report Card 2020
NextDecade partners with Enbridge to build proposed pipeline for Rio Grande LNG
Rio Grande Valley: Big banks urged not to back high risk fracked-gas export terminals
New Report: Banks and Investors Should Avoid Supporting Rio Grande Valley LNG Projects
Woodlands-based LNG co. begins trading on Nasdaq after blank-check merger closes
Port of Brownsville approves agreement with Rio Grande LNG in support of wetlands restoration
Societe Generale and Macquarie Capital named financial advisors for Rio Grande LNG project
Second wave of Texas LNG export projects could take off in the next decade
NextDecade takes next step to build pipeline and LNG plant in South Texas
Shrimpers and Fisherman for RGV request for analysis of whether Annova LNG's cancellation frees capacity on the Valley Crossing Pipeline that could be used in lieu of a second Rio Bravo pipeline Under CP20-481 et. al
Monthly Status Report No. 13, December 2020 of Rio Grande LNG, LLC under CP16-454.
Note to Societe Generale on financial risks of supporting fracked gas export infrastructures
Gas, mostly derived from fracking, is piped to the coast, supercooled and compressed into a liquid - liquefied natural gas (LNG). Due to over-extraction from fracking the USA faces an oversupply of natural gas. Across North America companies are planning to build dozens of LNG export terminals. These infrastuctures span hundreds of acres. Each facility connects to a network of pipelines that are fed from fracking sites. The three terminals planned for the Rio Grande area (Rio Grande LNG, Texas LNG and Annova LNG) have each received authorisation from the Department of Energy to export their LNG overseas. They are awaiting completion of a full environmental review and a final decision from the Federal Energy Regulatory commission (FERC). This decision is expected to be taken in 2017.