Blurring Lines – Commonwealth LNG Climate and EJ Arguments Cross Into State Court

Originally published for customers October 22, 2025.

What’s the issue?

The 38th Judicial District Court in Louisiana vacated Commonwealth LNG’s Coastal Use Permit (CUP) for insufficient environmental justice (EJ) and localized climate impacts analysis.

Why does it matter?

Construction cannot begin without a valid CUP, exposing new procedural risk.

What’s our view?

The case could mark a strategic shift after Seven County, with project opponents applying NEPA-style arguments to state laws. The Louisiana attorney general has already indicated an intention to appeal.

The 38th Judicial District Court in Louisiana vacated Commonwealth LNG’s Coastal Use Permit (CUP) for insufficient environmental justice (EJ) and localized climate impacts analysis. Construction cannot begin without a valid CUP, exposing new procedural risk. The case could mark a strategic shift after Seven County, with project opponents applying NEPA-style arguments to state laws. The Louisiana attorney general has already indicated an intention to appeal.

Background and Decision

The CUP was issued by the Louisiana Department of Energy and Natural Resources (LDENR) — now the Louisiana Department of Conservation and Energy (LDCE) — Office of Coastal Management (OCM). For context, a timeline is below:

• August 20, 2019 — FERC application filed.
• August 30, 2019 — CUP application filed.
• July 26, 2024 — CUP Issued.
• October 10, 2025 — CUP Vacated, appeals must be filed within 30 days.

The court found that OCM violated state law and its public trust duty under the Louisiana Constitution based on deficiencies in its climate impacts and EJ analysis. In resolving these two issues, the court also stated that OCM would need to support a “finding that the benefits of the project outweigh the costs to the community.”

Of the two, the climate change argument will likely be the most controversial. ​​The court held that, under Louisiana law as informed by the state constitution,

“OCM has a duty to consider the totality of this project’s secondary and cumulative impacts, including the potential impacts on storm severity or sea level rise in the coastal zone together with two (2) other LNG facilities.”

The court was careful to distinguish between the project’s impacts on global climate change analysis (which OCM lacks the authority to regulate), and how the terminal could exacerbate the local impacts of climate change that are occurring in the coastal zone. But this distinction creates a logical dilemma: assessing how the facility could worsen storm surge or sea-level rise arguably requires some broader climate context or analysis.

The EJ analysis argument is likely less controversial, only because the duty to conduct EJ analysis broadly is not disputed. Instead of conducting its own EJ analysis, OCM stated that it properly relied on EJ analysis from the Louisiana Department of Environmental Quality (LDEQ), which the court took issue with because LDEQ’s review did not address coastal-specific EJ issues such as marsh loss, population displacement, or storm-surge vulnerability.

At the federal level, this decision matters because FERC’s certificate order made the CUP a preconstruction condition. As a result, Commonwealth cannot begin site preparation or construction until LDENR completes a new analysis and issues a replacement permit—or unless the decision is reversed on appeal.

What’s Next: Procedural Pathways

There are two main routes that could resolve this dispute as shown below, with appeal being the more likely near term next step:

Reports indicate that the state intends to appeal the ruling, which would move the case to the Louisiana Third Circuit Court of Appeal, with potential review by the Louisiana Supreme Court if further contested. Alternatively, OCM could redo its analyses and reissue the permit, including a new finding that the project’s benefits outweigh community costs, as directed by the opinion. Depending on litigation, this could still be an outcome, even if less likely in the near term.

Investor and Project Implications

The ruling reinforces how state-level procedural risk cannot be ignored, even in states that have historically been welcoming of natural gas infrastructure. Even with an active FERC certificate, a conditioned state permit remains a single point of failure that can suspend construction and delay financing milestones.

Specific to Louisiana, if the decision holds, it could have implications for other proposed projects still in preconstruction, particularly those proximate to EJ Communities as shown below:

Each of these projects is either in pre-filing at FERC or has progressed to the formal application stage. If opponents apply similar arguments, state-level challenges to CUPs could emerge as a new pressure point for projects awaiting authorization from the OCM.

Evolving Litigation Strategy?

For years, project opponents have pushed FERC to expand the scope of environmental reviews, pressing for more robust downstream and cumulative climate change impacts analysis, and as we discussed in Another Significant Ruling From the D.C. Circuit — Rio Grande and Texas LNG Projects Vacated, broader EJ analysis. But recent developments — namely the Supreme Court’s Seven County decision, which reaffirmed agency discretion under NEPA, and the Trump administration’s rollback of EJ-related directives — have limited the effectiveness of those federal challenges.

The Louisiana court’s reasoning in vacating the CUP reflects a parallel strategy, but one grounded entirely in state law. Opponents could be shifting tactics: where Seven County constrained NEPA litigation in federal court, state court may be emerging as the next forum for project challenges, potentially allowing NEPA-style arguments about cumulative impacts, localized climate risk, and EJ to continue under a different legal framework.

The court’s directive that OCM make a finding that “the benefits of the project outweigh the costs to the community” also echoes FERC’s obligation to determine whether a project is consistent with the public convenience and necessity, further blurring the line between federal and state review. But these arguments are novel, so there is still a good chance that they could be narrowed or reversed on appeal.

If you would like to discuss how state or federal litigation is impacting infrastructure projects, please contact us.