Back on the Bayou: Louisiana Reissues Commonwealth’s CUP and Opens a Two-Track Legal Fight

Originally published for customers November 26, 2025.

What’s the issue?

Louisiana reissued the Coastal Use Permit (CUP) for the Commonwealth LNG terminal after it was vacated for inadequate environmental justice (EJ) and climate impacts analysis.

Why does it matter?

The reissued CUP lifts the immediate construction barrier, but it also triggers new procedural exposure and litigation risk.

What’s our view?

Louisiana’s rapid reissuance while reserving the right to challenge the original vacatur signals alignment with permitting the project. Third Circuit appeals remain likely, though Louisiana is unlikely to become a bellwether for broader EJ or climate analysis.

Louisiana reissued the Coastal Use Permit (CUP) for the Commonwealth LNG terminal after it was vacated for inadequate environmental justice (EJ) and climate impacts analysis. The reissued CUP lifts the immediate construction barrier, but it also triggers new procedural exposure and litigation risk. Louisiana’s rapid reissuance while reserving the right to challenge the original vacatur signals alignment with permitting the project. Third Circuit appeals remain likely, though Louisiana is unlikely to become a bellwether for broader EJ or climate analysis.

Background: A State Permit Rebuilt Under Pressure

Louisiana’s Office of Coastal Management (OCM) issued the original CUP in July 2024. In October 2025, the 38th Judicial District Court vacated the permit for failing to analyze localized climate impacts, coastal-specific EJ considerations, and Louisiana’s public-trust balancing requirement.

As we discussed at the time in Blurring Lines – Commonwealth LNG Climate and EJ Arguments Cross Into State Court, the ruling demonstrated how opponents are adapting NEPA-style arguments under state law after the Supreme Court’s Seven County decision narrowed federal NEPA obligations. We expected either litigation or the reissuance of a permit. The latter has now transpired, and the former still seems likely.

OCM has now reissued the CUP, but importantly, the revised permit repeatedly states that OCM does not concede “the correctness” of the district court’s decision and reserves “all possible defenses and legal arguments.” In other words, the state agency decided to reissue the permit but still reserve the right to challenge the vacatur. The agency explained that it is “in the best interest of the State to not delay this matter further.”

Taken together, the reservation of the right to appeal and the decision not to delay reinforce the State’s support for the project and previous messaging that it intends to appeal the vacatur to prevent those rulings from shaping statewide precedent.

How OCM Restructured The Record

The structure of the new permit contained little new analysis conducted by OCM. Instead, it incorporated FERC’s EIS and the Louisiana Department of Environmental Quality (LDEQ) air-quality analysis “as if copied in their entirety.” The revised permit reflects the same three deficiencies flagged by the court, with the public interest finding that the project benefits outweigh costs embedded throughout the two main areas of concern:

Localized Climate Impacts — The court directed OCM to conduct an assessment of how the project could exacerbate coastal-zone climate effects like storm severity, flooding, and sea level rise together with other nearby LNG facilities. OCM adopted climate analysis from the FERC EIS’s, including flooding and storm impacts, and emphasized its conclusion that there is no acceptable methodology to attribute discrete physical effects to GHG emissions. OCM also pointed to the flood protection structures and mitigation plan, before concurring with FERC’s conclusion that emissions would have an “incremental” effect. It ultimately concluded that impacts from potential flooding and storm surge would be adequately minimized, and outweighed by economic benefits.

EJ Review — The court directed OCM to analyze the facility’s impacts on EJ issues. After noting that there is no definition or analytical framework for EJ, OCM similarly adopted FERC’s analysis, noting that because EJSCREEN (a tool used in the original federal analysis) is no longer available, it could not recreate that analysis itself. OCM stated it “independently reviewed and analyzed” the issue, concurred with FERC’s analysis, and found potential EJ impacts outweighed by project impacts.

Both of these analyses are vulnerable to challenge. Opponents would likely argue that OCM did not actually perform the coastal-specific analysis the court required, particularly on climate impacts, where the court tried to distinguish between global climate change analysis and how the terminal could exacerbate the local impacts of climate change that are occurring in the coastal zone.

Potential Litigation Pathways

Procedurally, the permit language makes it sound as if Louisiana might still appeal the district court’s EJ and climate rulings to prevent them from establishing statewide standards. On the other side, project opponents are also likely to file a new petition for review of the reissued permit as discussed. These two tracks could converge in a few ways. The following analysis presents two options, though there could be more. These can get tricky, but rest assured that we will track any subsequent litigation closely as it evolves, and will explain as it progresses.

One potential pathway is that if opponents file the new CUP challenge first (or close in time to the State’s appeal), the Third Circuit may hold the State’s appeal in abeyance while the district court reviews the reissued CUP. The district court would then decide whether OCM’s new permit complied with its direction. If the district court again rules against the State, Louisiana can appeal that ruling. The Third Circuit would then likely consolidate the appeals, producing a unified ruling on:

(1) the correctness of the district court’s EJ, climate, and public-trust standards; and

(2) whether OCM’s reconstructed record satisfies them.

This is a common posture when sequential permits and overlapping records are involved.

A second possibility is that the Third Circuit moves quickly on the merits of the original vacatur if Louisiana files its appeal immediately. The Third Circuit could decide the appeal of the original vacatur before the district court evaluates any new CUP challenge. If the appellate court reverses or narrows the district court’s holdings, that decision could weaken or moot the new challenge. A later challenge would then proceed under a revised legal framework or be dismissed entirely.

The Bigger Picture

This case reflects how opponents may shift EJ and climate arguments into state processes as federal NEPA challenges narrow. The arguments raised here could reappear elsewhere, but Louisiana is an unlikely bellwether. Its regulatory posture, permitting history, and the speed of the reissuance all point toward continuity rather than expansion of EJ or climate review. These arguments are more likely to gain traction in states predisposed to more expansive EJ or climate analysis. Still, the litigation is worth watching, particularly to see if any new precedent emerges in Louisiana.

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