Model process could speed up pipeline permitting, working group says

By the OGJ Online Staff

HOUSTON, Sept. 5 -- States should consider developing a model process for siting natural gas pipelines, a working group of state utility regulators and elected officials said, to help speed up the permitting process.

Many industry participants have pointed to a prospective shortfall in pipeline capacity as limiting its ability to serve a projected rise in gas demand. The existing gas infrastructure was not planned to meet the expected rate of gas consumption growth which the nation will experience in the next decade, particularly demand driven by electric power generation, the working group said.

Barriers to expansion include duplication at several levels of government, concluded the group, which included representatives from the National Association of Regulatory Utility Commissioners, the Interstate Oil and Gas Compact Commission, the Department of Energy, the Federal Energy Regulatory Commission, the Department of Interior, the American Gas Association (AGA), and the Interstate Natural Gas Association of America.

As a result of recent events, "new and expanding businesses often no longer assume needed energy supplies will be available," the report concluded. To expand, or develop new businesses, as well as meet basic human needs of the population, it said states must ensure that an adequate energy infrastructure is available.

The National Petroleum Council estimated more than 38,000 miles of new gas transmission lines will be needed, as well as 263,000 miles of new distribution lines. The working group said that much pipeline will require the attention of every state, and many regulatory bodies within the states.

State and local regulations add oversight critical to the unique interests of the state or locality, the working group conceded. However, it said only a few states effectively coordinate the natural gas pipeline permitting process, while often overlapping federal, state, and local regulatory requirements can add many months -- and sometimes years -- to building a pipeline.

"Consumers won't get to enjoy the benefits of natural gas, such as cleaner air, more jobs at home, and increased energy efficiency, if they can't get the gas delivered to them," said David N. Parker, CEO of the AGA.

To speed up pipeline construction, the working group recommended a series of changes, including:

-- Governors should establish within the office of governor a coordinating effort to eliminate duplication among state and local natural gas permitting entities. The coordinating effort will insure all data needed are provided by the applicant in a timely fashion and will facilitate sharing of information and experts among state and federal agencies, and with local governments.

-- States should decide, prior to beginning a natural gas pipeline siting process, what information they need to collect and communicate that information to the general public and to the pipeline. States should identify all participants in the permitting process and coordinate regulatory roles, with the goal of processing information only once. States should consider naming a lead agency which would have the authority to monitor processing schedules within existing regulatory requirements.

-- Every state economic development office (Commerce Department) should be involved with the coordination effort and recommend actions to streamline the process.

-- States should work with the federal government to conduct regional needs and pipeline/utility corridor identification. This federal-state coordination is endorsed in Executive Order 13212, issued May 18, in which President Bush created a federal interagency task force charged with "...setting up appropriate mechanisms to coordinate federal, state, tribal, and local permitting in geographic areas where increased permitting activity is expected."

-- States should consider instituting a task force of state environmental experts to focus and coordinate all environmental issues stemming from the proposed pipeline. When time-sensitive issues arise, the governors need a plan for reaction, which would be coordinated with federal entities where appropriate.

-- States should encourage research spending, including government, university, and pipeline spending, to develop pipeline installation techniques that disturb less surface, complete the installation more quickly, and enhance safety.

-- States should review policies, procedures, and regulations for the siting and installation of natural gas pipelines to eliminate duplication, reduce the cost and time of review, without compromising state regulatory oversight.

-- States should be a partner in FERC pipeline prefiling citizen meetings, and consider developing similar citizen meetings for intrastate projects.

-- States should encourage public education and outreach on the part of the pipeline. Such public education should include adequate information about steps taken to ensure public safety, details of construction, and contingency plans.

-- States should consider developing a model for clear and accessible state and local regulations governing the siting of natural gas pipelines.

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